Corporate performance management union will accelerate Exact's expansion into the higher end of the midmarket.
Posted Sep 17, 2007
Business solutions provider Exact Software today announced its intention to acquire corporate performance management specialist Longview Solutions for approximately $51.5 million in cash on a cash-free and debt-free basis.
In a Webcast this morning to announce the deal, Exact's chief executive officer Rajesh Patel categorized the acquisition as strategic, and suggested that Longview will help Netherlands-based Exact strengthen its business-empowerment software portfolio by killing two birds with one stone. First, in the CPM arena, Exact gains existing functionalities and technology--as well as a solid foundation for building new technology going forward. Patel cited a recent evaluation of the CPM space from research firm Gartner, in which Toronto-based Longview Solutions was classified as a "visionary with a sound ability to execute." Second, Exact will acquire what Patel called Longview's "strong and sound" customer base -- a list that includes Boeing, Cisco, and Time Warner. These customers, Patel added, are "highly distinguished [and] offer great opportunities for the two companies moving forward."
While enterprise resource planning (ERP) is currently the core domain of Exact's market, Patel said during the Webcast that he believes Exact's future growth will reside not in the ERP space but in the area of e-Synergy, the company's Web-based collaboration platform. By utilizing Longview's strong CPM platform to strengthen Exact's business solution, Patel told analysts, the acquisition will help Exact "empower our customers with these kinds of products and services."
Furthermore, Patel added, the two companies have a complementary market focus, which enhances their strategic pairing. Exact currently holds a strong footprint in the small and midsize business market, he said; with the acquisition, the company will be able to reach higher. Patel said he anticipates "great opportunity in the higher end of the mid market, where customers seek deeper and more complex functionality."
At the same time, the companies hope to see Longview's reach into the midmarket expand further, providing opportunities to upsell and cross-sell its CPM platform to Exact customers. "I think it's a huge opportunity for us to be able to leverage the resources, and the geographic footprint, of a large multinational software company to help us in delivering on our existing growth trajectory within the large enterprise space," John Power, vice president of business strategy at Longview, tells CRM. On top of all that, the acquisition will allow Longview to "expand into some new markets in terms of midmarkets and [other] geographies," he says.
However, Patel emphasized during the Webcast that Exact "absolutely does not want to be a Tier 1 company, and Longview will not exclusively be a midmarket company."
Patel assured listeners that the acquisition will not affect Exact's October 2005 acquisition of Vanguard Solutions Group, an Illinois-based provider of enterprise business intelligence solutions. While Vanguard focuses more on business analytics, Longview will aim to provide solutions for areas such as consolidation, forward planning, sales modeling, and budgeting -- bringing Exact into a realm beyond ERP and into the front office.
Amid the various strategic initiatives, Patel also emphasized the cultural compatibility between the two companies. "Longview is clearly a product company, and that's also what Exact is at heart," Patel said, adding that the cultural fit is also evident in the way "we approach markets...[and in our] fantastic managerial chemistry."
destinationCRM.com Dispatch: October 11, 2005
Exact Software has completed the acquisition of Vanguard Solutions Group.
destinationCRM.com Dispatch: March 8, 2005
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