Analysts say that Corel Corp.’s acquisition of graphics software vendor Jasc Software and a renewed focus on the consumer segment may help put the company back on track.
Minneapolis-based Jasc is best known for its Paint Shop Pro line, which targets home and small office users. The software
is a good fit with Corel’s existing graphics software, CorelDraw and Corel Painter, which addresses the professional user market, said Brett Denly, executive vice-president of worldwide marketing.
“”What the acquisition is really giving us is a great play within the consumer space,”” said Denly.
Financial details of the transaction were not disclosed, but Denly said that Corel plans to maintain Jasc’s Minneapolis home as a U.S. office.
There are approximately 120 employees at Jasc, according to Jasc CEO Kris Tufto, who said he would remain at Corel in an executive position.
Jasc name to go
The Jasc name will disappear in short order, but the Paint Shop brand will be around for the foreseeable future, said Denly.
Eventually it may be absorbed into an existing Corel brand name, but Paint Shop products will be sold as standalones for now.
This is the first acquisition for Ottawa-based Corel in three years. In 2001, Corel bought Toronto firm SoftQuad, which made Extensible Markup Language (XML) tools like Xmetal, as part of a failed push to enter the enterprise software market.
Last year Corel itself changed hands when it was acquired by San Francisco venture capitalist Vector Capital.
Since the ownership change, Corel has grown its revenue by approximately 40 per cent, according to Denly.
“”We’ve had a very, very focused strategy since going private,”” said Denly. “”Our focus strategy is really around our core products . . . WordPerfect, Corel DrawGraphics suite and Corel Painter.””
Corel’s Jasc acquisition is certainly in keeping with that strategy, said Joe Wilcox, an analyst at Jupiter Research.
“”Corel’s definitely back on track,”” he said.
“”Graphics has been a very strong area for Corel for a very long time. There was a CorelDraw long before Corel acquired WordPerfect.””
By adding more consumer products to its graphics line, Corel may be able to capitalize on the boom in home digital photography, said Wilcox.
The Jasc acquisition is “”a really good confirmation”” that Corel is ready to focus on its strengths again, said IDC Canada Ltd. analyst Warren Shiau. Corel’s reach has sometimes exceeded its grasp, he said, particularly when it attempted to break into the Linux market.
Corel sold off chunks of its Linux distribution in 2001 to Ottawa neighbour Xandros for US$2 million.
“”If they go off on that tangent again, we can all start worrying,”” said Shiau.
Shiau agreed that digital photography represents an opportunity for Corel, particularly at a time when so many other vendors like Microsoft and HP are just now delivering on integrated products aimed at that market.