Buying Spree

Buying Spree

Copyright 2003, Traffic World, Inc.

Just when you think it''s over, there''s more. Agile Software Corp. is purchasing competitor Eigner for an undisclosed amount of stock and cash. Both firms are product lifecycle management software providers.

Customers of Eigner, based in Waltham, Mass., include Lockheed Martin, Siemens and ZF. The combined company will have over 1,150 customers.

There is minimal overlap between the two companies, said Bryan D. Stolle, chairman and CEO of Agile. Eigner''s software and geographic sales are both complementary to Agile''s. Eigner focuses more on the front-end, with planning and design, while Agile focuses on the back-end, Stolle said. Geographically, Eigner is focused on Europe while Agile concentrates on the United States and Asia, he said.

The two companies have been working together for nine months and already have begun integration, said Jay B. Fulcher, COO and president of Agile. The two sales teams will be integrated immediately. Eigner''s German research and development site will become the combined company''s European development center.

Dr. Martin Eigner, founder of Eigner, will be on Agile''s executive advisory board. Eigner''s president and CEO, Frank Azzolino, will be CEO of Agile''s industrial products line. Eigner products will continue to be supported "for the foreseeable future and will form the core of our industrial product," he said. Agile will begin shipping the combined solution immediately; it already has been shipped to one customer, who is currently implementing it, he said.

The deal is expected to close in the next 30 days. Agile will reduce headcount by approximately 10 percent, said Carolyn Aver, CFO of Agile. "We believe the worst is behind us," said Stolle, referring to the weak economy and downward technology sales.

Edward M. Wolfe, an analyst at financial company Bear Stearns & Co., is maintaining Agile''s underperform rating. "If the deal closes, it is our view that the move is a step in the right direction, although it remains to be seen how smooth the transition will be for both companies," he said.

Meanwhile, Ascential Software is acquiring integration software provider Mercator Software for $106 million in cash. Peter Gyenes, chairman and CEO of Ascential Software, said the acquisition "creates the largest independent enterprise data integration software company with annualized revenue of $250 million dollars and over 3,000 customers," he said.

"It''s a growth-oriented move," said Gyenes. Customers will begin seeing benefits immediately, he said. Plus the acquisition "adds $90 to $100 million in revenues" to Ascential, said Gyenes.

The two companies'' facilities will be integrated where possible, said Gyenes, although Ascential will keep Mercator''s research and development facilities in Reston, Va., Boca Raton, Fla., and London. The sales teams will also be integrated, he said.

Mercator announced its second quarter results along with the acquisition announcement. For the second quarter ended June 30, 2003, Mercator reported a net loss of $9.2 million on a GAAP basis, compared to a net loss of $8.3 million a year ago, an 11 percent increase. The company reported revenue of $22 million, compared with $27 million in the same quarter last year. Its total expenses under GAAP were $30.4 million, a reduction of 12 percent from $34.5 million in the same quarter last year. Total pro forma expenses were $24.4 million, down from $32.2 in the same quarter last year.

Mercator''s results were due to sluggish technology spending, said chairman and CEO Roy C. King. "Nonetheless, we made further progress in right-sizing our cost structure as evidenced by the 24 percent reduction in pro forma expenses, and the 44 percent reduction in pro forma net loss," he said.