Firstwave Acquires Connect-Care
Firstwave Technologies, a Web-based CRM solutions provider, announced Tuesday the acquisition of Connect-Care, a CRM software developer for the software industry, through a merger with a subsidiary of Firstwave.
According to the terms of the merger agreement, Firstwave will deliver 200,000 shares of common stock to the shareholders of Connect-Care, as well as an additional potential earn-out payment of $300,000 in cash, payable in 2004 if certain revenue goals are attained.
The acquisition of Connect-Care marks the first acquisition in the company's focused growth strategy announced in November 2002. "From an operational perspective the acquisition of Connect-Care should be accretive to earnings and increase revenues in this first quarter," David Simmons, COO of Firstwave, said in a company conference call.
Richard Brock, president and CEO of Firstwave, commented on the merger during the call, saying, "We believe this acquisition presents tremendous operational and strategic synergies for the now-combined customer and employee bases of Firstwave and Connect-Care. We expect that Connect-Care's strong, developed pipeline will afford Firstwave the opportunity to see tangible sales results in the short term. Firstwave is dedicated to the ongoing support of Connect-Care's products and, by supplementing Connect-Care's customer support team with Firstwave's resources, to continuing and improving existing customer relationships."
Joe Longoria, cofounder of Connect-Care, said during the call, "Our customers at Connect-Care have asked for two things that Firstwave currently delivers: a truly Web-based architecture and a powerful customization engine. Our base technology is client/server based, and we use PowerBuilder as the development and customization tool. I believe that our customers are going to be very excited about the capabilities that they will receive as we deliver the functions they chose us for on the technology Firstwave has developed."
Brock said that he hopes that Connect-Care customers will convert to Firstwave's Web-based CRM solution in the future, since the two firms' products are functionally similar. The only difference, according to Brock, is that one is Web-based.
In addition Brock said that the acquisition was especially attractive because Connect-Care's business is primarily software producers. The merger adds a new customer base for Firstwave, and also presents opportunities for private-label deals with Connect-Care's software vendor customers, Brock said.
Firstwave also announced the addition of two key Connect-Care executives to its management team. Former Connect-Care President Jeffrey Longoria will fill a major leadership role in Firstwave's U.S. sales organization in his capacity as vice president of sales. Additionally, Joe Longoria, as vice president of professional services, will lead Firstwave's U.S. professional services organization.