Software AG has bought the application modernization activities of Jacada, adding to its portfolio of tools for prolonging the life of mainframe applications by giving them a Web interface.

The sale marks Jacada's move out of the application modernization and middleware software business in order to concentrate on development of call center systems.

Software AG has bought the rights to Jacada's Terminal Emulator, Interface Server, and HostFuse products, among others. Jacada keeps its WorkSpace and WinFuse software, and rights to the Jacada brand.

Eight of Jacada's research, development and support staff will join Software AG to maintain the application modernization products.

Software AG will pay $26 million in cash for the business, which generates $12 million in annual revenue, it said Thursday.

It will gain access to 200 of Jacada's 1,200 customers, mostly in the U.S., giving it a chance to expand its SOA (services-oriented architecture) work in an important market, it said.

The deal is tiny compared to Software AG's purchase of U.S. software vendor webMethods: It paid $546 million for the SOA and business process management (BPM) company in June.

Software AG is also looking to acquire other smaller companies or business units which could benefit from its global infrastructure. Earlier this year it paid $62 million for 80 percent of its Israeli distributor SPL Software.

Also on Thursday, Jacada announced the appointment of a new CEO, Paul O'Callaghan, from Jan. 1. President of the company since May 2006, he replaces Gideon Hollander, who will remain with the company as chairman.