CA Technologies acquiring Boulder-based Rally Software for $480M

BOULDER – New York-based software firm CA Technologies (Nasdaq: CA) announced Wednesday afternoon that it has inked a deal to acquire Boulder-based Rally Software Development Corp. for $480 million.

The price works to about $19.50 per share for Rally (NYSE: RALY), a 44 percent premium on Wednesday’s closing price. Shares closed at $13.51 Wednesday but shot up to $19.22 per share in after-hours trading in the wake of CA’s announcement. CA shares remained flat.

Both companies’ boards of directors have approved the deal, which is expected to close in the second quarter of CA’s 2016 fiscal year, which is the third quarter of calendar year 2015.

In an email, Rally chairman and CEO Tim Miller stated that Rally is expected to operate as part of CA once the deal closes, and added that he expects Rally’s management team “will continue to run the business and report into senior executives at CA.”

Rally is headquartered at 3333 Walnut St. in Boulder and also has an office in Denver, with about 280 employees total in Colorado.

“We anticipate that Rally employees will be needed in their current work locations, including our Boulder and Denver offices,” Miller stated.

Rally, founded by current chief technology officer Ryan Martens in 2001 as F4 Technologies Inc., went public in 2013 with a $97 million initial public offering. The company, which provides Agile development software and services, has about 500 employees spread across four continents. The company finished its own 2015 fiscal year that ended Jan. 31 with sales of $88 million. CA reported $4.3 billion in sales in fiscal year 2015.

“Rally is a leading provider of Agile development software and services, with offerings that complement and expand CA’s strengths in the areas of DevOps and Management Cloud,” CA CEO Mike Gregoire said in a press release. “Every developer dreams of creating truly transformative software that responds to a business challenge extremely quickly. Joining forces with Rally makes this dream a possibility for millions of developers worldwide, and in turn opens up the possibility of a whole new range of experiences driven by software.”

CA Technologies, which has 11,500 employees worldwide, already has a presence in Colorado, with just more than 300 employees in the state at offices in Fort Collins, Englewood and Colorado Springs.

“CA and Rally have more than four years of history working together, and we are thrilled to be taking this next step in our relationship to deliver unique value to both CA and Rally customers,” Miller said in the press release.

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