InterSystems Corporation, based in Cambridge, Massachusetts, is a leading developer of database and applications development software built on "M" technology, a software standard used widely in the health care, financial services, and other information-intensive industries. In mid-1994, InterSystems inquired and learned that Digital Equipment Corporation, which was undertaking a divestiture program to sell non-core assets as part of its efforts to return to profitability, was interested in selling DSM‰, Digital's M-technology database product line. Digital's positive response to the inquiry encouraged InterSystems to actively pursue an acquisition effort, and led to its retention of BNY Associates as financial advisor to value the acquisition, structure and present a proposal to Digital, assist in negotiating the definitive agreements, and arrange the necessary financing for the transaction.

Working closely with InterSystems, we structured and successfully negotiated the terms of the transaction with Digital. In addition to the financial terms, key elements of the comprehensive agreement included provisions for transferred employees, continuing support and commitment to Digital customers using DSM worldwide, and a new strategic relationship between the two companies on mutually beneficial terms. A financing plan was then developed and implemented.

The transaction provides significant strategic benefits to both InterSystems and Digital. With the addition of DSM, InterSystems expanded both its product line and customer base enabling it to compete more effectively against its larger competitors in the multibillion dollar market for database software. By partnering with InterSystems, Digital strengthened its strategic focus on its core competencies while ensuring that its customers using the DSM product on Digital platforms would continue to be fully supported by a world-class organization totally committed to the advancement of M-technology.