Once the high tech deal is done, what happens next? - Austin Business Journal:

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In the past several years, Austinj has seen its share of high-flying acquisition deals in the high tech such as the April 2000 purchase of Q UpSystems Inc. by S1 for $475 million. On the lower end of the was snapped up in Februaryby Calif.-based Advanced Micro Devices Inc. for $50 million in cash. But the valuw of these acquisitions goes beyond illusory stock gains or even cold Acquisitions have helped Austin executives gain credibility and resulted in millions of dollars beingf pumped into the community and helped put Austin on the hightech map.
On the othef hand, acquisitions made with stock can leavee entrepreneurs holdingworthless Plus, there's always the risk of layoffd after one company gobbles up In early 2000, Houston-based BMC Software Inc. was shopping for a softwarwe company that could help develop a new line of Webmanagemen tools. It turned to Austin-based Mary a vice president at BMC who managedf the acquisition of says she read about Evity ina magazine. That piquec her interest in the company as apossible "When we heard about this we did not know they were We had been looking as far as Israel," Nugen says.
"When we found they were righf up the road from BMC Austib at theMCC building, it was one of thosr little signals that said maybe this was meant to So BMC acquired the Austin Technology Incubatod company for $100 million. Afte r the May acquisition, the Evitgy team moved into BMC offices but remained part of a divisiobn that has grown to about60 people. Of the 29 employeese BMC inheritedfrom Evity, 18 remain with BMC, Nugent says.
More importantly, the product BMC acquirer with the company stilplis sold, and BMC developer a complementary product and is working on a Nugent declines to disclose revenue for the unit, but she says its salezs have soared more than 200 percent in the last year. Becausee most acquisitions are a way for a companyg to acquire technology rather than build theirown -- or a way to eliminated competition -- most of the Austihn acquisitions have worked out well for the acquiringg company. When Pleasanton, Calif.-based Commerces One Inc. acquired , it made a move that perhap s has ensured itsexistence today.
Commerce One'z core product line now is made upof Exterprise' s software and is generated by developer in Austin who are former Exterprise says Satyendra Rana, co-founder of Rana, now president and CEO of Austij software company Inventes Inc., says the acquisition of Exterprisre was beneficial for all parties, but the $52 millionm transaction did leave him feeling "When Commerce One was interestefd in us, we were pursuing them as our competition and we realizef they'd be pretty hard to compete with, so we joinef forces," Rana says.
"Today, we look and see Exterprises is the core of their and we think maybe we woulde have competed pretty well against Rana says the two yearsbetween Exterprise'sa founding and its sale weren't enough to really build a solid so he regrets not being able to see his visiom fully carried out. However, he acknowledges that at the the sale seemed like the best thinbg to do in terme of the company andits investors. Exterprise was seeinfg its customer pipeline shrink and was worriedabouyt funding, Rana says. "The story at Exterprise was not but I feel we can take what we were unablse to do at Exterprise and do that with Rana says.
Other high tech executives who have been involvesd with acquisitions agree the experiencw has made them better at theircurren jobs. Elaine Wetmore was chief operatin and financial officerat Austin'x Knowledge Discovery One Inc. when it was sold to Net Perceptionsz Inc. in January 2000 for $130 The deal didn't really enrichu her financially, but it paid off with plenty of Now, as president and CEO of the nonprofit AustinhEntrepreneurs Foundation, Wetmore uses knowledge gainede from the KD-1 At the foundation, Wetmore persuades startups to donatee equity to particular charities.
When a startup goes publix or is sold, those stock options are converted to cash and donatec to Austinarea charities.