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Novell sells Celerant, focuses on Linux
May 24, 2006

Novell announced on May 24th that it has sold its shares in Celerant Consulting, its management consulting branch, to Caledonia Investments, a UK-quoted investment trust, for $77 million.

Celerant was part of Cambridge Technology Partners, which Novell Inc. acquired in 2001.

This acquisition never worked well for Novell. As Novell CEO Jack Messman said in 2002, "Hindsight is always 20/20, but who could have guessed we'd see such a collapse in the services business? "

Investors like Blum Capital Partners LP had long wanted Novell to sell off Celerant and make other changes. Other stockholder-driven changes have yet to materialize, however.

For example, Novell started to plan a share repurchase programn of up to $200 million of Novell common stock in September. At the time, Jack Messman, Novell's chairman and CEO said, "Our stock buyback is just one of the elements of a plan aimed at enhancing shareholder value and securing Novell's future as an important provider of solutions to the IT market." However, Novell hasn't acted on that plan yet, because it's been in a blackout period.

With Celerant's sale behind it, sources close to the company indicated that the stock-buyback plan would soon start.

Now that Celerant is sold, Novell will be better able to focus on its core businesses of Linux and open source; systems, security and identity management; and its renewed interest in workgroup computing. In particular, Novell is looking forward to a summer launch of the next-generation of its SUSE Linux Enterprise 10 for Novell server and desktop systems.

These are based on the recent OpenSUSE 10.1 Linux community release.

The sale of Celerant should have have no impact on Novell's existing IT consulting business. Novell will continue to offer IT consulting services around its Linux, NetWare, and services build around those operating systems.

"The sale of Celerant allows Novell to concentrate fully on our core technology growth businesses." said Messma in a statement.


-- Steven J. Vaughan-Nichols



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