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| Home - Software M&A Review - Mar 05 Issue |
Software M&A Insights: 2005 Q1 Review
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Siebel Systems (NASDAQ: SEBL)acquires edocs
Category: e-billing software
Purchase Price: $116,000,000
Seller Revenue: $40,000,000
Revenue Multiple: 2.9x
Payment Terms: Cash
SEG’s Perspective:
In search of incremental revenue and new markets, Siebel Systems acquires edocs, a provider of e-billing and self service software applications. edocs’ software enables customers to submit and track electronic payments and manage online bills and accounts. Siebel is hoping vertical applications can help offset 17% year-over-year decline in core CRM license revenue, but the e-billing sector is fragmented and highly competitive. Siebel previously acquired Motiva (Incentive compensation management) and Eontec (Multichannel retail banking software) 2003 as part of its revenue diversification/vertical market strategy.
Infor Global Solutions acquires MAPICS (NASDAQ: MAPX)
Category: Manufacturing ERP Software
Purchase Price: $347,000,000
Seller Revenue: $172,800,000
Revenue Multiple: 2.0x
Payment Terms: Cash
SEG’s Perspective:
As U.S. manufacturers struggle to retain customers and compete globally, their IT solution providers have shared the pain, resulting in consolidation among manufacturing software developers. The latest example - Infor Global Solutions (formerly Agilisys), a provider of manufacturing and distributed software to select industries acquires Mapics, a competing provider of software to discrete and batch processes manufacturers. The purchase price represents a 10% premium to Mapics’ pre-announcement closing share price. The combined company will boast more than 17,500 customers in 70 countries. Mapics had increased trailing-twelve-month (TTM) revenue 10.4% and TTM EBITDA 131% year-over-year (YOY) but was unable to excite investors, resulting in a 15.4% decline in enterprise value from 4Q03 to 4Q04.
EV: Enterprise Value = equity purchase price, plus seller’s interest bearing debt, minus seller’s cash & cash equivalents
This report was prepared by Software Equity Group, L.L.C. (SEG), a mergers and acquisitions advisory firm serving the software, life science and technology sectors. SEG is solely responsible for its content. This material is based on data obtained from sources we deem to be reliable; it is not guaranteed as to its accuracy and does not purport to be complete. This information is not to be used as the primary basis of investment decisions. For more, please visit www.softwareequity.com, or phone (858) 509-2800.
 
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