Bluestone Software, Inc. (Nasdaq: BLSW) fell 2 13/16 to 20 3/8 after Hewlett-Packard Co. (NYSE: HWP) agreed to buy the company in a stock-for-stock transaction.
Hewlett-Packard said the acquisition of the Philadelphia, Pennsylvania-based e-commerce software provider will help bolster its software offerings and boost earnings in fiscal 2001.
Bluestone shareholders will receive .2433 pre-split Hewlett-Packard shares for each of their shares. Hewlett-Packard shares closed Wednesday at 86 13/16.
“A new generation of Internet software is being developed to help companies participate in the emerging services-based model of computing,” said Bill Russell, vice president and general manager of HP’s software and solutions division. “By adding Bluestone’s technologies to our portfolio, we’re enabling our customers to capitalize on this next wave of business and technology transformation.”
Bluestone also reported a 190 percent year-over-year increase in third-quarter revenue to $11.6 million, and a loss before charges of $7 million, or 33 cents per share. The results were better than the 42 cents per share loss expected by analysts.
A year earlier, the company lost $3.6 million, or 26 cents per share. Software license revenue for the quarter climbed 194 percent from a year earlier to $9.1 million, while services revenue rose 192 percent to $2.5 million, Bluestone said.
The deal and the results were announced after the close of trading Tuesday. On Wednesday, Bluestone announced an alliance with Progress Software Corp., under which the SonicMQ messaging server from Progress will become part of Bluestone’s “Total-E-Business” product.
Also Wednesday, Legg Mason reportedly downgraded Bluestone to market perform from strong buy.