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It has been on a steady acquisition kick since 2004 and certainly weathered more than its share of storm and scandal, but could CA be on the path to a buyout? The Deal's Cheryl Meyer examines the possiblility in the Jan. 29 issue of The Deal newsweekly. The company has not been without its obstacles, she notes: "Last year alone, it revamped its bungled sales organization, delayed financial filings and restatements, lost a handful of seasoned executives, reported disappointing financials and stock-options irregularities and deflected ongoing criticism of its board, CEO and management practices. Seven financial analysts have downgraded the company's sagging stock since July 2005. ...
In November, Sanjay Kumar and Stephen Richards, the former CEO and head of sales, respectively, at the Islandia, N.Y., company, were sentenced to 19 years in prison collectively for securities fraud and obstruction of justice related to a $2.2 billion accounting scandal earlier in the decade. On Jan. 16, former CA general counsel Steven Woghin received a two-year prison sentence for similar charges in connection with the scheme." Some sources said the technology giant might catch the eye of a tech-experienced private equity suitor, like Fort Worth-based Texas Pacific Group and Menlo Park, Calif.-based Silver Lake Partners, or a strategic bidder like IBM Corp., a deal that would likely draw antitrust scruitiny, or Oracle Corp., a deal which likely would not. The company would likely draw a hefty pricetag, one source pegged it at $16.5 billion, and opinions are mixed on whether it is prime takeover material or too risky an idea. Regardless, the company's own acquisition spree has been noteworthy. BUYING UP In July, CA announced plans to acquire data recovery software maker XOsoft Inc. The IT management software giant of Islandia, N.Y., formerly known as Computer Associates International Inc., is acquiring Waltham, Mass.-based XOsoft at a time when losing data due to unexpected events, such as Hurricane Katrina, is fresh in companies' minds. XOsoft's products are designed to provide uninterrupted access to all types of file and application servers and allow instantaneous recovery from any type of disaster. CA has made strides in the right direction after facing trouble for past accounting practices. It replaced management, signed a Deferred Prosecution Agreement with the DOJ and is back on track for making strategic acquisitions. Although, there are some stock-option irregularities that need to be cleared up so past results will reflect true value. GONE SHOPPING
--Basdeo Hiralal and Carolyn Murphy
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