A Done Deal Novell Agrees To Sell Wordperfect To Corel For $115 Million

Corel Corp. bought the WordPerfect business of Novell Inc. for $115 million Wednesday, relieving Novell of an acquisition it bobbled and positioning itself to compete with Microsoft Corp. in sales of the most popular office software products.

The WordPerfect business, once one of the brightest stars in the software industry, faces a hard climb to take back market position from Microsoft.

But Corel chief executive Michael Cowpland is confident of a payoff in the combination of its advertising skills and graphics software expertise with new on-line features WordPerfect has developed for its main products.

“It will enable us to increase our market share quite rapidly,” he said.

In addition to the cash and stock offer, Corel will license Novell’s GroupWise and Envoy communications software and other technologies for a minimum royalty payment of $70 million over the next five years.

Analysts said Novell got as much money as it could expect for WordPerfect. But it is far less than the $1 billion it paid just two years ago when then-chairman and chief executive Ray Noorda envisioned building a company that would compete with Microsoft in most areas of personal computer software.

Novell is the leading seller of software that links PCs in networks. The company’s current chief executive Bob Frankenberg said the sale “allows Novell to focus on what we do best and that’s networking.”

Experts say Corel faces an uphill battle in its attempt to gain market share from Microsoft.

“Microsoft owns the suite market,” said Ann Stephens, president of PC Data in Reston, Va. “That is going to be a tough nut to crack.”