Arbor Software Corp. and Hyperion Software Corp. agreed Tuesday to merge in a transaction valued at $642 million in stock, creating one of the largest U.S. makers of financial software for businesses.
Arbor agreed to issue 0.95 share for each share of Hyperion. Arbor makes customized programs for sophisticated financial planning and analysis; Hyperion software lets companies compile and analyze large amounts of management information.
The companies said they were merging to form a company that can market a broader line of complementary software products. Shares of both firms dropped because of concern about their ability to combine product lines and sales forces, analysts said.
“There’s a belief that the two companies together aren’t worth as much as they are independent,” said Robert Tholemeier, an analyst at First Albany Corp., who rates Arbor a “strong buy.”
Sunnyvale-based Arbor tumbled $8.25, to $33.87, while Stamford, Conn.-based Hyperion dropped $6.75, to $31.37.
“The market is nuts,” said John Dillon, Arbor’s chairman and chief executive.
“I think this is huge, and people are reacting without understanding it. There is no vendor so well-poised to dominate” the analytical applications market, he asserted.
