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| Home - Software M&A Review - Nov 02 Issue |
Software M&A - September Deals and Insight
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Itron (ITRI) / Regional Economic Research
Category: Energy forecasting software
LTM Revenue Multiple: 1.82x
Terms: Cash
SEG s Perspective:
Itron, a full solution provider to the global energy and water industries, picks up Regional Economic Research after acquiring LineSoft and eMobile. Regional Economic Research provides energy forecasting software and services to major energy utilities and marketers, Itron s target market. Itron saw an excellent strategic fit, demand for Regional Economic Research s products and services among its customers, and a solid near term revenue opportunity. Regional Economic Research may receive additional earnout payments totaling $4M.
Open Text (OTEX) / Centricity (TSX:CTI)
Category: Desktop messaging and collaboration software
LTM Revenue Multiple: 1.69x
Terms: Cash
SEG s Perspective:
Open Text, a leader in collaboration and knowledge management software picks up a desktop messaging and collaboration solution and eight million users by acquiring Centricity. This is a strategic buy for Open Text with the eventual goal being integration of voice communications and messaging into Open Text s LiveLink platform. Backing out Centricity s cash, Open Text paid $9.9M, which is not too bad considering Centricity s net loss of $9.36M for the first nine months ending June 30, 2002.
DoubleClick (DCLK) / Protagona plc (AIM: PTG.L)
Category: Marketing automation software
LTM Revenue Multiple: 1.50x
Terms: Cash
SEG s Perspective:
Both DoubleClick and Protagona provide products to plan, execute, and measure multi-channel marketing campaigns. With Protagona, DoubleClick takes out a competitor, and acquires some useful technology. Although the purchase price represents a 63% premium to Protagona s closing price, the multiple is really negative 1.13 after factoring in the $22M on Protagona s balance sheet. Protagona lost $3.61M on revenue of $5.18M in the first six months of its fiscal year.
Celartem Technology / Extensis
Category: Software products for digital imaging
LTM Revenue Multiple: 1.36x*
Terms: Cash
SEG s Perspective:
Celartem, a Japanese developer of technology for the storage and secure distribution of digital images, decided it wanted to be a products company as well. Extensis is a leading developer of software products for creative professionals, a key market for Celartem, and has been consistently profitable. There s a $2M earnout here, which could increase the multiple to 1.67, respectable for a niche market transaction.
* Seller's revenue estimated or determined from third party data.
 
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