CDC Acquires c360 Solutions
CDC Software announced today it has signed a definitive agreement to acquire c360 Solutions, a privately held CRM add-on solution vendor and Microsoft Dynamics CRM tool developer. CDC will make c360 into a new business unit within the organization, delivering add-on software tools for Microsoft CRM and other .NET platforms.
C360, a Microsoft channel sales partner, provides CDC with a built-in indirect channel to exploit.
Terms of the deal were not disclosed, though it is a small one--under $20 million, according to CDC--and therefore not subject to the usual SEC regulatory approval process. Both companies are based in Atlanta, which helped speed negotiations, according to Eric Musser, CTO and executive vice president of corporate strategy for CDC Software. "Because c360 is a private company, the deal developed very quickly. All of their team is staying in place. Their executives are really pumped," Musser says.
Musser expects the acquisition to have a positive effect on CDC's existing relationship with Microsoft. "We've always been a big partner with Microsoft on the Pivotal side, but there was an entire market of customers we were missing, because [Microsoft Dynamics CRM is] a different space," he says. "Most of our CRM sales are direct, while c360 is all MS CRM channel. Both c360 and Pivotal will continue to run as standalone entities." Musser adds that the biggest changes will be synergies with back-office functionality and a different go-to-market strategy, with c360's expertise in adding vertical functionality for clients a major factor.
Robert Bois, research director at AMR Research, notes that the acquisition takes good advantage of the current industry state. "CDC, and Pivotal before that, have been making an effort to push their CRM upstream. Their closest competitor in this is Onyx, which is trying to do the same thing," Bois says. "Meanwhile, companies with on-demand software-as-a-service offerings like Salesforce.com are coming out of the woodwork to serve accounts of a few dozen people at a time. This left a void in certain industries and segments, so CDC is ultimately looking to fill in the space they left."
CDC is no stranger to acquisitions, with both Pivotal and Ross ERP now helping to hold up its corporate umbrella. The company has also attempted to acquire Onyx twice recently, with the second bid still on the table. "CDC is wisely looking to acquire a bigger footprint in CRM, with more capabilities," Bois says. "This is definitely a land grab. Onyx recently retained the services of [financial advisory firm] Piper Jaffray, so it looks like they're taking this second offer more seriously."
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