LAYOFFS ASIDE, COREL-NOVELL DEAL IS GOOD BUSINESS

After three weeks of heavy negotiating, Novell confirmed this week that it will sell its Business Applications Division to Corel Corp., which is based in Ottawa, Canada.

The announcement was made in the same conference room in the Provo Park Hotel where Novell announced on Halloween it intended to sell the BizApps division.In the three months since that fateful announcement, rumors and rumors of rumors about the future of the former WordPerfect ran rampant throughout the computer trade press, financial and industry analysts, and Happy Valley.

At the time of the initial announcement, some 1,800 individuals employed by Novell either worked in or for the BizApps division.

Since then, approximately 600 have been removed from the payroll, both through voluntary and involuntary layoffs, and others through natural attrition.

In Wednesday's noon press conference, and in the press tele-con-fer-ence held earlier in the day, both Novell and Corel officials explained that between 600 and 700 Novell employees will immediately become Corel employees as a result of the acquisition.

That leaves the immediate future of as many as 600 Novell employees in doubt.

According to Corel officials, the Canadian firm has already begun evaluating the remaining BizApps employees toward the possibility of extending job offers to upward of 200 to 300 additional individuals.

For its part, Novell will also try to place as many of the remaining employees within its fold. But here again, there is no guarantee that all will remain employed either by the networking software giant or the graphics software leader to the north.

The cost.

In the announcement, Corel agreed to pay slightly more than $185 million for Word-Perfect, through stock (9.95 million Corel shares), $10.75 million cash and a minimum future royalty obligation of $70 million over the next five years.

And by the close of trading on Wednesday, stock prices for both firms had closed up for the day.

Following the completion of the deal (which is anticipated in 30 days or less), Novell will own just under 20 percent of Corel's outstanding shares, making it the largest shareholder.

Accordingly, Novell has been offered a seat on Corel's board, which will apparently be filled by Novell Executive Vice President Jeff Waxman.