Iona Technologies has purchased Californian open-source software company LogicBlaze in an all-cash deal, the terms of which have not been disclosed.
Peter Zotto, Iona's chief executive, said it was a "smallish transaction in many ways", but would not give details of the price paid. LogicBlaze has annual revenues of about $1 million (€750,000) and nine employees and will move to Iona as part of the deal.
Mr Zotto said that Iona believes that customers will use a mix of proprietary and open-source software to implement service-oriented architectures.
Iona's fast growing Artix line and newer open-source Celtix product help organisations implement these kind of architectures.
"This acquisition will contribute to the ramp up of our open-source business in the second half of 2007 and going forward in 2008," said Mr Zotto.
It is the second acquisition that Iona has made in just over a month, following an all-cash deal for British-company C24.
Iona currently has about $55 million in cash reserves and will employ 370 people following the latest acquisition.
Although three of the founders of LogicBlaze will move over to Iona, company chief executive and chairman Winston Damarillo will not.
Larry Alston, Iona's vice-president of corporate strategy and product management, will manage LogicBlaze while it is integrated into Iona's open-source group.
Mr Zotto conceded that Iona could have availed of the technology without purchasing the company, but said the deal was "about the personnel rather than the technology".
LogicBlaze currently has 25 customers signed up to subscription contracts that are worth an average of just over $40,000 each. Mr Zotto said "very few" of these are with existing Iona customers.
Tricia McEvoy, an analyst with NCB Stockbrokers welcomed the acquisition and said it was an area that Iona needed to build up expertise in.
She said that given Iona's cash position, cash generative Corba business, high growth Artix line, and the opportunity it has in the the open-source space, it must continue to be a takeover target.
Any bid for Iona was likely to come from a large player, like BEA Systems, rather than one of its peers, Ms McEvoy said.
