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After much of the work for closing had been completed, a deal that would have made Prentice Hall Professional Software part of an online information services company fell through. The software group's parent, Paramount Communications, had agreed to sell Prentice Hall to Information America with Paramount retaining up to 49% ownership in 3 Prentice Hall units. The breakdown came amid an escalating takeover war for Prentice Hall parent Paramount by QVC Network Inc. and Viacom Inc.
ATLANTA - A deal that would have made Prentice Hall Professional Software part of an on-line information services company fell through last month after much of the work needed to close the deal had already been completed.
The software group's parent, Paramount Communications, had agreed to sell Prentice Hall to Information America with Paramount retaining up to 49 percent ownership in three Prentice Hall units, which included Prentice Hall Legal and Financial Management and Prentice Hall Legal Management.
The breakdown came amid an escalating takeover war for Prentice Hall parent Paramount by QVC Network Inc. and Viacom Inc.
"It makes everything more complicated," said Jeff Alperin, Information America vice president and general manager, without confirming that the battle for Paramount was the root cause of the deal's failure
"I can confirm we have terminated our agreement with Information America," said Carl Folta, senior director at Paramount Communications, without commenting on the reasons for the deal's collapse.
Prentice Hall software officials had no comment, referring queries to Paramount.
The Prentice Hall operations last year employed about 900 people and had revenue of about $83 million. Information America had 1992 pro forma revenue of $25 million.
The deal, announced in June, was supposed to close this quarter in a transaction involving a combination of common stock, debt, preferred stock, common stock warrants and options.
A substantial amount of work had been completed, including negotiation of a purchase agreement, due diligence and preparation of a proxy statement, Alperin said.
"It's going to cost us a lot of money," Alperin said, adding that the process would also involve cost to Paramount "except that they have deeper pockets than us."
Alperin said a charge would be made to the company's third quarter results which were expected on Oct. 27. Release of those results had been delayed in order to ascertain the deal's cost to Information America.
Prentice Hall's products for the accounting market include the Software 1040 tax package, Answers! planning and analysis software, and the Practice Management time and billing program.
Copyright Faulkner & Gray, Inc. Nov 1, 1993