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Originally published Tuesday, April 19, 2005 at 12:00 AM

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WRQ, Attachmate software companies merging

Wrq and Attachmate, two of the Seattle area's long-standing private software companies, are merging in a deal that could position the combined...

Seattle Times technology reporter

WRQ and Attachmate, two of the Seattle area's long-standing private software companies, are merging in a deal that could position the combined company for a public offering.

The deal is also expected to result in layoffs as the companies consolidate local and global operations after the deal is completed in about 45 days.

Still undecided is what the company will be called and whether it will be headquartered in WRQ's Seattle offices or Attachmate's building in the Factoria area.

Executives at both companies said consolidation was needed to grow their mature businesses.

Despite the prospect of layoffs, they said the region will benefit from the creation of a midsize software company that will help fill the gap between Microsoft and the region's numerous small technology companies.

Attachmate basically was acquired by the same group of investment companies that bought WRQ in December — Francisco Partners, Golden Gate Capital and Thoma Cressey Equity Partners — all of which have offices in the San Francisco area.

Attachmate


Headquarters: Bellevue

Founded: 1982

Chief Executive: Frank Pritt, founder

Employees: 650

WRQ


Headquarters: Seattle

Founded: 1981

Chief Executive: Shaun Wolfe

Employees: 300

WRQ, founded in 1981, and Attachmate, founded in 1982, both produce "host access" software that helps companies manage and access information stored on large computers such as mainframes and older "legacy" systems.

"So the dinosaurs are mating," joked Mark Anderson, a Friday Harbor technology commentator. He said WRQ and Attachmate "provided some adult supervision" in the Seattle software industry over the past two decades.

"They have their own stories, but in each case they created good managers who went on to run other companies, so they've been invaluable to the community, in addition to whatever wealth they've created," he said.

The combined company will be the second-largest host access provider, behind IBM, with about 16 percent of the market, according to IDC statistics provided by the companies.

A sale price and the potential number of layoffs were not provided. None of the investment firms would comment.

When WRQ was acquired last year, executives said the sale would give the company resources to expand through acquisitions and perhaps eventually take the company public.

"This is a big step towards that direction," Chief Executive Shaun Wolfe said.

The combined company will have sales of more than $200 million, but Wolfe said that should grow to between $500 million and $1 billion.

Attachmate is the larger of the two companies, with 650 employees, including about 390 in Bellevue and about 40 developers in Bellingham.

WRQ has 300 employees, 230 in Seattle.

"While there are some redundancies, and those will affect at least some degree the Seattle area, what's exciting about this for this community is we really are serious, and our investor group is serious, about putting money behind us becoming a half-billion-dollar or billion-dollar company," Wolfe said.

"It's really healthy for this community to have this diversity in size of companies," he added.

The combined company will be led by Jeff Hawn, a former BMC executive the investors named as WRQ chairman after that deal closed.

Wolfe will become a senior vice president and Attachmate founder and Chief Executive Frank Pritt will retire.

Pritt, 64, said he had been looking for acquisitions to boost his company's growth when investors approached him.

"Like most high-tech software companies, I think we all struggled after the Y2K and dot-com burst," he said.

"We were fortunate to get ourselves back on our feet but we had a flat year last year, and I was essentially out looking for ways to get Attachmate moving again."

Attachmate remained "strong financially" and never had an unprofitable year, he said.

Pritt did not know how the merged company will be configured but he has a preference.

"Being from Attachmate, and everybody's baby is the prettiest baby, I'm going to assume it's going to be called Attachmate and my management team's going to run the whole show," he said.

"I'm sure the people over at WRQ are going to say the same thing."

Brier Dudley: 206-515-5687 or bdudley@seattletimes.com

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