Apologies for the confusing headline, but I couldn’t resist.
This morning, long-time software maker Corel Corporation turned over full ownership to Corel Holdings, a limited partnership controlled by an affiliate of Vector Capital, majority investor of the company behind many familiar software programs like WordPerfect, CorelDRAW, WinZip, Paint Shop Pro and WinDVD (most of them obtained through acquisition of smaller software firms).
The LP of the private equity investment firm, which already owned approximately 68% of the Corel Corporation, announced this morning that it has successfully completed its tender offer to purchase all outstanding common shares of the company, evidently not including those owned by Corel Holdings and its affiliates. The shares were purchased, in cash, at a unit price of $4.00, excluding interest and less applicable withholding taxes. Painful, because Vector had already offered to buy the company for $11 per share in March 2008.
With benefit of hindsight, Corel should have probably accepted that offer, of course.
Corel Holdings is now commencing an offering period of its tender offer to acquire all remaining common shares of Corel Corporation, which will expire at December 4, 2009.
Vector Capital assumed control over Corel Corp for a reported $133 million in 2003. The VC firm subsequently moved to take the company public in 2006, but retained majority ownership. The partial spin-off wasn’t much of a hit: Corel initially priced its IPO at $18 to $20 and later revised that to $16. But the company saw shares open at $15.36, and it has never once traded above that price (as is often the case when stocks open at a lower price point than initially set). Shares currently change hands for about one quarter of the opening price.
Corel Corp earlier this week justified the offer to take the company private, saying that complete ownership is necessary to inject capital quickly and avert a default on its loans. The company, once a fierce rival to Microsoft on the productivity software playing field, had been on the ropes for quite some time now. Corel was required to keep its total debt level below 2.75 times its trailing 12-month EBITDA, but on Monday indicated that it expected to fail that test this month.
The economic downturn sure rocked this company, established in 1985, very hard. Let’s see how it will fare now that it’s under Vector’s wings in its entirety again.
Sad! I hope they will make a good comeback. I am a die hard fan of CorelDRAW and WordPerfect….
Considering the open source versions out there that rival it and Microsoft… can’t say this is a surprise. I’m wondering how they are even able to stay afloat this long! OpenOffice, Thunderbird, Gimp etc. they replace their software completely for most uses.
Jon @ WoodMarvels.com
It is truely more sad that you are a fan of these products. Welcome to the new century, you might want to give up your Walkman also, and look into something called an iPod.
I saw notice that Corel had financial issues in my stock-related news feeds the other day. All of their software has been commoditized by open source:
7zip
The GIMP
Inkscape
OpenOffice.org
VLC Player
The only people that use anything they sell are just ignorant of the options.
So everybody using any Microsoft product is also ‘ignorant of the options’? You can’t be serious.
Yes they are very much ignorant.. I am still seeing people using IE6 and who have never heard of Firefox
If I say anything against IE6 they laugh at me saying “IE6 is one of the stable browsers around the world”
I’m just disagreeing with the statement that anybody not-ignorant will prefer open source over closed source. In your example; I’m not convinced that any not-ignorant person will choose FF3.5 over IE8 just because FF is open source.
Only ignorant enterprise accounting departments continue to pay Microsoft’s outrageous software seat license fees for Windows server, Office, Sharepoint, etc.
Pleading ignorance would be the only plausible excuse when facing stockholder charge of a lack of due diligence.
In fact, I am serious. An OS is a different beast than an application and the OEM+MSFT relationship is more difficult to break than those of 3rd party applications (B2B vs. B2C). Ignorance is the driving factor, which is why more independent software vendors will find it difficult in the consumer market as people are more easily able to learn about their options.
But that doesn’t mean they should prefer open source just beacuse it’s open source
You seem obsessed with the open source idea. Should I have just said free? Would that help you understand the difference?
No, I guess we just disagree. I love FOSS by the way, I just see a lot of companies around picking software on other criteria.
*Corel* software, not Microsoft! You can’t be serious.
Except that with the notable exception of VLC that software is not comparable either in terms of feature set, stability, ease of use or support and may also require Linux which IS STILL not a viable option for most users.
Why on earth Linux would not be a viable option for most users?
Ubuntu is easier and quicker to install than any flavour of windows today.
Is that because of Office and Outlook?
P
Corel make Painter – nothing comes close to that app. CG pros such as Andrew Jones, Craig Mullins, and Daryl Mandryk all produce amazing work with it (and their considerable talent).
hahah, great headline
Who in the world still uses fax machines, i mean, who in the world still uses WordPerfect?
And does Microsoft still holds minority ownership in Corel?
No. Microsoft divested its Corel interest in 2003, to Vector Capital. That’s largely how Vector consolidated control of Corel.
Cheers,
Doug
I hope this ultimately helps the company. They’ve made some tremendous strides in building the next-generation versions of their video and photo-editing software, and I will always have a soft spot for WordPerfect. And CorelDRAW is legitimately a market-leader.
Coldbrew – there’s plenty of room for commercial software. For example, I prefer Jing Pro for taking screenshots over Gimp (which I’ve used off and on since Spencer and Peter were hammering out code in the xcf across the street).
People will pay for software that neatly and quickly solves specific problems. Think PT boats, not battleships.
No matter what you believe I wrote, I never intended to convey that I see no benefit to commercial, closed source software.
Switching costs are more of an issue for most people rather than upfront costs. ‘Total Cost of Ownership’ is not a concept grasped by the population at large.
I also have no idea why using the ‘Reply’ function in this comment system is difficult.
I am a long time user of WordPerfect and PhotoPaint. I do use Draw from time to time.
I will not switch from WP to any other word processing system. My ability to customize it improves my speed, accuracy and ease of use. Were these applications available on Linux would gladly transfer.
The versatility and compatibility these Corel applications offer, in my book, further their utility as an outstanding option!
May Corel succeed!
Jean
We’re not all meant to succeed via the fast lane…
I think that this is the first time for me to tell this story in over 20 years!
I recall walking into the offices of Corel and applying for a job. I had an interview with the top dawg (CEO) and got the old “I know who you are! Who you workin for; Gates, or Jobs, or who??? Sorry, your over-qualified, but your application is ??? What’s this???….”
That routine has come to be all too familar to me over the yrs. If they all would’ve just woke up and smelled the coffee one of them could’ve had it all -instead of just sporatic bits and pieces.
There’s really been very little trust in IT from what I’ve experienced. Well, at least I can say that I’ve never been on the wrong end, nor did I ever want to be!
Sometimes I imagine that I’m the only honorable person to have been involved in IT. Everything can change though!
Back to the subject at hand:
Unfortunately, his mistake was realized after it was too late for both of us. He called me at least 4 times over a 2 year period to appologize and dare I say “begged” me to work “with” him! No-longer “for him” as he had asked in his 1st and 2nd phone calls trying on his best Jobs and Gates attitude; which convinced me never to work with or for him ever – period! I never asked for nor was I ever given all of the proposed details.
Unfortunately, Corel wasn’t doing all that well at the time and by the time of his last call I was planning to be on my way to Europe (Feb/88) to leave all of the nagging IT stuff behind me. I’d had enough let downs…or so I had thought!
With all fareness I should add that I had moved several times and they could not find me! Yet, they could’ve asked any number of people working their in the industrial park about my whereabouts before it was too late!
As fate would have it, while in Europe I would come to do something that would once again change the IT industry! But, that’s another story…(I already hear you! I’ll be writing a few more stories at a later, yet at an undetermined date – if you think you’ve got investigative instincts then use them!)
Corel could’ve beat out Microsoft once-upon-a-time if they had followed my strategy…
Again, too bad, too sad…
There were people working at Corel and in the industrial park at the time that had told me things like: “Their all laughing at you for trying to get in Corel and think your strategy was to make them go under!”
One guy even wanted to fight with me! That is, until I managed to calm him down and explained the strategy to him (he was a junior manager). Later, he presented it to Cowpland who liked it once he had all of the facts straight.
Later he would tell me: “At first he (Cowpland) thought you were crazy when he was told about your interview, now he wants to hire you!”
I was still bitter and said: “Ha, more like partner now or he can forget it!” He asked if he could use my strategy, but he already had some ideas of his own to present to Cowpland. I was a bit surprised, but he’d said that Cowpland would never accept my complete strategy, nor would he ever make me a partner. So, I said: “Sure – whatever! Just don’t put my name on it.” I was asked to continue to help him and at first I declined, but after being reminded that we were friends I gave-in. I was leaving Ottawa soon anyways. And I left it at that.
Later I was told that that junior manager had been promoted to head marketing manager, a new division, using a simulation (watered-down version) of my strategy. Well, we all know what happened…
Now, there’s a new window of opportunity open for them (the new owners) to better promote the products if their wise enough to jump through that window and land properly on their feet this time.
Let’s wait and see…
Am I the only one who couldn’t understand a word of this post???
I mean comment
Corel Draw is such a great software, i prefer to illustrator for so many reasons, i just wish they will improve raster/bitmap operation inside corel draw. Rest of Corel product aren’t so valuable because of opensource & Adobe :/
ps: Corel Draw is the main reason I procrastinate switching to Mac, i just hope they’ll return to OSX someday..
Huh?
PaintShopPro is a very viable, reasonably priced, and easy-to-use alternative to Photoshop (limited to Windows, of course). We’ve kept our older release for many years, and run it side-by-side with Photoshop for simple tasks.
There’s a world of freebies but, we’d STILL like to see PaintShopPro around, and even made available to our MacOSX boxes.
Yes, while I prefer the JASC solutions to their buyers, Corel, it’s still a good product that I use both personally at home for photos and professionally at work for quick graphics tasks (generally not production work).
1993 called….they want their software back. Wait a second! They just called again…. they also want their joke back.
Painter is the coolest niche product ever. Please Corel, keep this incredible software vibrant — just upgraded to Painter 11.
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This comes as no surprise. As a Corel user since 1995, I’ve seen first-hand how the quality and stability of their software has declined considerably since 2003. The author attributes Corel’s problems to the downturn in the economy, but I attribute it to something else…
Instead of focusing on making their primary software (Draw, Photo-Paint, and WordPerfect) as good as it used to be, Corel has instead chosen to spend it’s resources buying up smaller software companies, and then ruining their newly acquired software programs. Users of Jasc’s Paint Shop Pro and Micrografx Designer know exactly what I’m talking about.
As the software industry in general continues it’s decline in matters of quality and customer support, Corel has spent the last few years taking those negatives to a whole new low, and as a result, the Corel ship is sinking fast.
It’s very sad, because there was a time when Corel software flat-out kicked ass; and it did so at a fraction of the price that the Adobe whores charge.
From my standpoint, it may well be time to start learning some other programs.
Corel, Corel, Corel. What an odd company, from day one.
Back when vector graphics apps barely existed as a product category, in 1989, I remember receiving a beta copy of CorelDRAW. It was simply so fresh, so far ahead of Adobe Illustrator that I immediately proposed authoring the first book devoted to Draw to Peachpit Press, Mastering CorelDRAW, and wound up cranking out three sequels.
In fact, I became so infatuated with DRAW that I talked Cowpland into letting me set up and run CorelNET.com for them in 1994, perhaps the first community-centric graphics site. Worse, I then founded and published the CorelDRAW Journal, was a columnist for Corel Magazine, taught DRAW seminars, presented at the DRAW conferences… yikes.
But it all went wrong when they began rushing out buggy yearly releases in the mid-nineties. I turned my attention elsewhere, as did many of their loyal users, and they never really got their momentum back. An opportunity lost.
But they hung in there and I hope they pull through their current problems. CorelDRAW is still a great app, as is Painter. We need all the alternatives to Adobe that we can get.
Corel make Painter – nothing comes close to that app. CG pros such as Andrew Jones, Craig Mullins, and Daryl Mandryk all produce amazing work with it (and their considerable talent).