• September 1, 2005
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

Pitney Bowes Will Acquire Firstlogic

Pitney Bowes plans to acquire all remaining shares of Firstlogic, a deal valued at $50.3 million, the companies announced today. Pitney Bowes, which already owns 10 percent of the privately held data quality company, will make Firstlogic a wholly owned subsidiary within the Document Messaging Technologies division. The transaction, subject to regulatory approval and other conditions, is expected to close in the third quarter of 2005. The acquisition will mark Pitney Bowes' second foray into the data quality and customer communication management market in as many years. "We entered the growing $4 billion customer communication management (CCM) market with the acquisition of Group 1 Software last year. The acquisition of Firstlogic extends our platform by giving our customers a more comprehensive portfolio of software, services, and solutions," Chairman and CEO Michael J. Critelli said in a prepared statement. "Firstlogic's extensive relationships with top-tier system integrators and enterprise software vendors enhance our distribution network and accelerate our global expansion." Firstlogic, like Group 1, will support Pitney Bowes' strategy of mailstream expansion, global penetration, and cross-selling. Firstlogic generated more than $55 million in revenue in 2004, and employs some 400 people. Rumblings had persisted for a year or more that Firstlogic was looking for a company to acquire it, so that part of the deal was not a surprise, according to Robert Lerner, senior analyst for research firm Current Analysis. The surprise, he says, was in the acquirer, because Pitney Bowes had already made a similar deal with Group 1. "Pitney Bowes leveraged Group 1 for its CCM capabilities, but that company's product was missing some parts that Firstlogic will fill in, such as data profiling," Lerner says. Overall, Firstlogic is the more integrated property, with strong synergies in the postal business--a key area for Pitney Bowes, according to Lerner. "Firstlogic was competing against big data quality and CCM vendors like Microsoft, IBM, Harte-Hanks, and Trillium." The effect of this acquisition on the industry as a whole will likely be an escalation of competition. "This eliminates one more independent player--and there are really only about a half-dozen remaining--and intensifies the competition among them," Lerner says. "When a billion-dollar company makes an acquisition in data quality, it puts a spotlight on the industry. Pitney Bowes is going to make a stronger play in data quality, and it could upset the dynamics of the industry." Related articles: What Data Quality Means to CRM Practitioners
Pitney Bowes to Acquire Group 1 Software
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