Rockville-based Sage Software Inc. said yesterday that it has completed its previously announced plan to merge with Index Technology Corp. of Cambridge, Mass.
The merger, valued at between $50 million and $55 million, results in the creation of a new company -- Intersolv Inc. -- that is expected to post sales of $70 million for the fiscal year that ends next month. It will be headquartered in Rockville.
Kevin J. Burns, former chief executive officer of Sage, will serve as chairman and chief executive of the new company. The former chief executive of Index, Richard A. Carpenter, will serve as vice chairman and chief of strategy and product architecture for Intersolv.
Both Sage and Index design computer-aided software engineering --or CASE -- tools, which automate the software development process so that it does not have to be written by hand.
In a statement, the two executives said that the merger creates the industry's largest supplier of CASE tools, with more than 100,000 customers worldwide.
They said that the formation of the new company enables users to turn to one vendor for CASE products that span mainframe, workstation and local area network platforms. "These products provide users the freedom to develop software using integrated or component CASE solutions, as their needs dictate," Mr. Burns said.
Under final terms of the merger agreement, 1.059 shares of Sage common stock were issued to the stockholders of Index for each outstanding share of Index common stock. Based on the current capitalization of both companies, former Sage stockholders own approximately 55 percent of Intersolv, while former Index stockholders own roughly 45 percent.
Intersolv's stock is scheduled to begin trading on the NASDAQ over-the-counter market today. Its trading symbol is ISLI. Sage traded yesterday for the last time at $10.375, up 12 1/2 cents.
Melody Ranelli, vice president of finance, said that there would be some duplication of administrative services as a result of the merger and that some jobs would be eliminated. She said it was too soon to estimate how many workers might be affected by the combination.