Twenty-four hours after announcing a $US135 million investment from Microsoft, software maker Corel announced that interim CEO and President Derek Burney has been named as the company's new leader.
Burney, who has been interim CEO and president since the resignation in August of founder and longtime CEO Michael Cowpland, played a key role in the negotiations that led to Microsoft's investment.
"Derek has demonstrated to the board's satisfaction that he is well qualified to lead Corel into an exciting and successful future," said Jim Baillie, chairman of Corel's board of directors, in a written statement. "The board is really impressed with Derek's accomplishments to date, especially how he negotiated our recently announced alliance with Microsoft."
Burney had served as the company's executive vice president for engineering and chief technology officer before being tapped for the interim posts. He has been at Corel since 1993.
The Ottawa, Ontario-based office-suite software company has endured a number of shakeups in the past year as it struggled to turn around a string of poor financial quarters. The vendor has also laid off a number of employees in the course of this year, including the recent elimination of 139 jobs at its engineering operation in Dublin.
The investment from Microsoft is part of a strategic relationship through which the companies do joint development work on Microsoft's .Net Internet initiative.
Chris Le Tocq, an analyst at Gartner Group Inc. in San Jose, said Burney's appointment wasn't a surprise, especially after the announcement of the Microsoft investment.
"The stock is up 70% and Burney brought in the agreement," Le Tocq said. "It can be categorised as an endorsement of Burney," he said of the promotion. Since Burney was already in charge since Cowpland's departure, Le Tocq called today's announcement "a formality."
In a statement about the investment, Corel said that Microsoft purchased 24 million nonvoting convertible preferred shares of Corel stock at $US5.62 per share. The companies valued the deal at approximately $US135 million, and said it signals the start of increased collaboration between the two rivals.
Corel and Microsoft said they plan to develop, test and market products related to Microsoft's .Net platform -- a broad initiative to supply products and services aimed at enabling new types of Web-based services. Trade shows, product launches and joint marketing efforts are examples of the companies' shared plans for the future.
The announcement will come as a surprise to some industry watchers. The two companies have been fierce rivals in the productivity applications market, and Cowpland has been one of Microsoft's more vocal critics. Part of yesterday's deal involves settling various outstanding legal disputes between the two companies.
Last month, Corel revealed that an unnamed investor would purchase 14.7 million shares of the company over the course of the next two years. At that time, the deal represented almost 20% of Corel's shares and would have been worth close to $US56 million.
While the company couldn't be reached to identify the unnamed investor, Monday's deal with Microsoft represents nearly 25% of Corel's total outstanding shares of common stock.