BRIO BULKS UP WITH $270M SQRIBE ACQUISITION.

Brio Technology Inc, the business intelligence software house has signed an agreement to acquire reporting tools company Sqribe Technologies Inc for $270m in shares, doubling the size of Brio overnight and stopping Sqribe's hitherto-secret plans for an IPO dead in their tracks. The two companies have been partners for about 18 months and Brio has apparently been looking over Sqribe very carefully for a while. According to Yorgen Edhol, Brio's president and CEO, there is "amazingly little overlap" between the two companies. The deal gives Brio's shareholders 55% and Sqribe's shareholders 45% of the enlarged company, mirroring the close proximity in revenues of the two concerns. Last year Brio did $40.5m in sales, while Sqribe turned over $39.2m. The combined company would have had operating losses of about $2.0m in the last fiscal year. Sqribe's largest shareholders are CEO Ofir Kedar and General Atlantic Partners LLC, both with about one-third of the stock and both have given their approval. Brio will issue 13 million new shares for Sqribe which, based on Monday's closing price of $20.75 per share, values the deal at about $270m. Brio plans to take restructuring charges of between $3m and $4m as a result of the deal, as general and administrative operations are merged. Brio expects the deal to close in late June and it expects it to be earnings neutral in the fiscal year ending March 2000 and accretive the following year. Brio brings around 4,000 customers to the new company while Sqribe boasts some 7,000. Under the terms of the deal, Edhol retains his position, while Sqribe's Kedar becomes chairman of Brio. Brio has traditionally been focused on the analytical side, reporting out of data marts and so on, while most of Sqribe's revenues come from its ReportMart tool, with its enterprise information portal making up most of the rest. Brio documents can already be included in ReportMart's reports. Brio says its long- term target is for operating income in the region of 10 to 15% of revenues, with license revenue accounting for between 65% and 68% and services comprising between 32 and 35%. Brio predicts gross profit margins of 82 to 85%. The new company will have about 500 employees and while there will be no job losses in sales, there are likely to be a few in the administrative staff.