Mercury Buys More IT Service Management Capabilities

Troubled business technology optimization software vendor Mercury Interactive has been on a buying spree again as a way to beef up its IT service management offerings.

Mercury officially announced Tuesday the purchase of technology from Vertical Solutions (VSI) and R&D staff and facilities from Tefensoft for a total of US$18.5 million in cash.

Under the terms of the new acquisitions, which closed June 7, Mercury has acquired PowerHelp IT software from U.S. service management and salesforce automation software vendor VSI. Mercury has also purchased all the outstanding capital stock of Tefensoft and will take on the Israeli software developer’s R&D staff and its facilities in the Tefen Industrial Park in Northern Israel. The Tefensoft staff and facilities will expand Mercury’s existing operations in Israel.

Mercury intends to incorporate the VSI technology into its Mercury Service Desk software in response to the changing nature of help-desk software. Applications are moving away from reacting to IT problems on an incident basis and expanding into providing change- and configuration-management capabilities.

In January, shortly after being delisted from the Nasdaq exchange, Mercury announced plans to purchase service-oriented architecture software vendor Systinet for $105 million in cash. Mercury failed to file financial reports on time, resulting in its delisting. An internal investigation revealed incorrect recording of stock-option grants leading to the resignations of the vendor’s chief executive officer, chief financial officer and general counsel late last year.

Last month, Mercury confirmed that it’s on track to bring its financial filings back up to date in the second quarter of this year, restating results from fiscal 2004 and 2005. Once all the filings are current, the vendor then expects to file all future required U.S. Securities and Exchange Commission filings in a timely manner.

-China Martens, IDG News Service (Boston Bureau)

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