Transactions
Aug. 13, 2002
Sun Obtains Privately Held Afara
High-tech giant Sun Microsystems Inc. of Santa Clara has acquired Afara Websystems Inc., a privately held San Jose company that develops microprocessor technology.
High-tech giant Sun Microsystems Inc. of Santa Clara has acquired Afara Websystems Inc., a privately held San Jose company that develops microprocessor technology.
The value of the stock deal has not been made public, but is less than $50 million, according to Dave Segre, a corporate and securities partner representing Sun at Palo Alto's Wilson Sonsini Goodrich & Rosati. Segre would not provide a specific dollar figure.
Under terms of the deal, Sun acquires all of the outstanding stock of Afara and assumes the company's outstanding options. It also has hired most of Afara's employees. The transaction closed July 22.
Segre says that he was gratified to get the deal done in such a difficult economic climate.
"Public companies are generally, given the market situation, under significant pressure not to 'overpay' for a target company," Segre says. "And there aren't going to be big premiums in deals these days."
But the good fit between the two companies helped get the deal done. Afara develops products based on Sun technology, so Sun is a logical acquirer, according to Segre.
The target company evaluated other alternatives, including other potential acquirers and potential financing to keep it independent, Segre notes.
"But given the market for private financing and their stage of development, this was a logical choice from their perspective as well," he says. "This was one that made sense on both sides, and, therefore, it got done, and it got done efficiently - although not without significant negotiation."
Palo Alto's Fenwick & West was counsel to Afara in the transaction. Sun in-house lawyers Laura Fennell and Christine Chua also played key roles in the deal.
Toni Vranjes
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