PKWARE, Inc., based in Milwaukee, WI, develops and markets data compression software for personal computers and local area networks. Ascent Solutions, Inc. (ASi), located in Miamisburg, OH, licensed PKWARE's technology and brand name to sell data compression software into the mainframe market.

PKWARE was acquired by a new management and investor group in 2000, and the new managers concluded that it made sense for PKWARE and ASi to join together. The advantages of a potential merger were obvious: both companies were considerable opportunities for cross-selling, since the customers of each company frequently had the need for both types of data compression. Another potential benefit was that each company had a different core competency that, once combined, would form a stronger, more well-balanced whole.

PKWARE approached Grace Matthews to contact ASi and open negotiations with its owners. Over a period of several months, Grace Matthews negotiated the relative valuation of the two businesses; developed terms for non-compete, employment, and equity ownership agreements; assisted with due diligence, and worked with the attorneys of both sides to resolve legal issues. After several months of negotiations, the deal came together and PKWARE and ASi merged into a single company. The merger is working well and the "new PKWARE" appears to prove that in successful deals the whole can be greater than the sum of its parts.

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