Sweden’s Telelogic to Buy Continuus Software of Irvine

Telelogic AB, a Swedish software company, agreed to buy Irvine-based rival Continuus Software Corp. for $42 million in stock, the companies announced Wednesday.

Telelogic, which makes software used for programming cellular phones, said it will pay $3.46 per Continuus share, 29% higher than the closing price Tuesday.

As the technology sector took a beating Wednesday in the stock market, Continuus Software’s stock rose 22%, or 59 cents a share, to $3.28 in Nasdaq trading.

Owners representing 36% of the company’s stock have accepted the bid, Telelogic said.

Stockholm-based Telelogic has been on a buying spree to capitalize on demand from cellular phone makers such as Ericsson AB, Nokia Oyj and Motorola Inc. In August it bought U.S. Quality Systems & Software Inc. for $97 million.

Continuus customers include Nokia and Lucent Technologies Inc., the biggest maker of phone equipment.

In a separate announcement, Continuus reported a net loss of $4.6 million, or 43 cents a share, for the third quarter, compared with net income of $280,000, or 4 cents a share, a year earlier. The quarterly loss included a $1.5 million write-down in the value of the company’s investment in Project 1918 Inc., an early stage Internet company.

Revenue rose 13.5% to $10.95 million.