The mobile middleware market has been hot — and seems poised to stay that way, with industry research firm IDC predicting a compound annual growth rate of 15.2 percent between 2007 and 2012, resulting in a $1.6 billion market. Looking to further entrench itself within this growing segment, Jersey City, N.J.–based Antenna Software has acquired Bothell, Wash.–based Dexterra, which Antenna described as its largest competitor. Financial terms were not disclosed.
"We're very excited," says Jim Hemmer, Antenna's president and chief executive officer. "We think that bringing together Antenna and Dexterra gives us a strong position as a combined entity in this space."
According to information provided by Antenna, the company will continue to support Dexterra's products and technology platform to current customers and partners. In the short term, Hemmer says, no decisions have been made regarding the time frame for the rebranding of these products under the Antenna label. He also stated that Dexterra would see only minimal layoffs, and those would be among administrative personnel. "We will continue to invest in existing product lines for Dexterra and Antenna, and make them available to our target market of enterprise customers," he says. "The vast majority of employees will come over, and three of Dexterra's key offices [in Washington State, Toronto, and the United Kingdom] will remain open and supported."
Hemmer says that the deal only took six weeks to come to fruition, rather quick in the world of mergers and acquisitions. The opportunity simply presented itself, he says, and Antenna needed to take advantage -- fast. "The deal made a heck of a lot of sense," he says.
Hemmer says that while his company has a strong footprint already in North America with its largely direct-to-enterprise selling model, Dexterra's strength in the European and Asian markets, in addition to its focus on carrier and reseller channels, will "give us what we think to be a preferred position in this space."
Stephen Drake, program vice president for mobility and telecommunications research at IDC, explains that the speed of the deal will not be to Antenna's detriment. "These two companies kind of grew up together and are very similar," he says. "They knew each other quite well, knew the markets, and competed against one another. They are no strangers to each other to any extent."
Hemmer insists that Antenna employees and customers are also excited about the acquisition -- mainly, he says, because the deal is merely the latest in a series of moves by Antenna. In November 2008, the company acquired the assets of competitor Vettro. "Our employees saw the benefits and value of that," he recalls. "Anytime you have the opportunity to establish yourself as a leader in any given market segment…is very exciting," he says. "This also reinforces to our customer base that our company is stable and has a strong balance sheet. This should give them a good feeling."
Drake warns that, in the immediate aftermath of the acquisition, it's vital that Antenna clearly lay out the next steps both for its current customers and for the ones coming over from Dexterra. "Both sets of customers must be reassured that there will be support for existing products, and [Antenna must] communicate the roadmap and benefits of the acquisition," he says. "The company must start to show what it has done, and the value. These are some of the key pieces Antenna must handle immediately."
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