Corel to change hands again?

Corel, maker of the WordPerfect and Draw programs, will likely have a new owner in the near future.

Vector Capital, which owns about 69% of Corel’s stock wants to buy the remaining shares and has enlisted Genuity Capital to advise the company on its future.

The latest announcement likely means Corel is up for sale and will be bought sometime over the next 12 to 18 months. Corel could still embark upon a new product strategy or take itself private. It’s easy to see why the company is reviewing its strategic options: Corel’s shares have dropped by about 40% since reappearing on the TSX in April 2006.

Anyway, the reason it’ll be sold is that the raison d’etre of a turnaround firm like Vector is to flip its assets for a tidy profit. Vector’s move to buy the remaining Corel shares it doesn’t own is to bring its average cost per company share down; not because it wants to hang onto the company for the long term.

Firms like Vector, upon acquiring an asset such as Corel, typically hack away at operations, bring a strategic focus to a company and eventually resell it to a willing buyer or some such variation.

Assuming Corel is flipped, it’ll be the third owner this decade for users of Corel’s Draw and WordPerfect programs.

Corel, was independently managed and run by founder Michael Cowpland, until 2000 when he left amid allegations of insider trading by the Ontario Securities Commission.

Former CEO Derek Burney, stabilized operations and eventually struck a deal with turnaround firm Vector Capital to save the beleaguered company. The deal of course came after an ill-advised attempt to offer Corel products under different brands.

Dave Dobson, an ex-IBMer of many years, was subsequently installed as CEO once Vector took over; his management team has brought a viable strategic direction missing from the company since well, the company’s release of CorelDraw way back in 1989.

Technorati Tags: Corel, Michael Cowpland, Corel Draw, WordPerfect