An Abandoned Acquisition: No Time For Questions

Firstlogic and Pitney Bowes will not pursue their merger agreement, an approximately $50.3 million deal for Pitney Bowes to acquire all remaining shares of Firstlogic, announced in September and expected to close today. "After reviewing the second request for information issued by the Federal Trade Commission, we mutually decided that it was in the best interest of all involved not to proceed further with the acquisition," said Eric Lieberman, president of Firstlogic, in a written statement. "Although we are naturally disappointed in this result, we have also learned a great deal by going through this process that can make us a better company." Pitney Bowes would not comment other than to confirm Lieberman's statement and that it will continue to own 10 percent of the privately held data quality company. It had planned to make Firstlogic a wholly owned subsidiary within the Document Messaging Technologies division and the acquisition would have been Pitney Bowes's second data quality vendor purchase. It bought Group 1 Software last year. "This whole process with the FTC is new to Firstlogic, because we've been a privately held company," says Amy Meyer, Firstlogic's director of strategic marketing. The second request gave the company "a heavy dose of questions that would have taken a large amount of time and investigation to answer. Not knowing if you will have the results you're looking to get made us think whether this is something we wanted to invest in. We decided not to." Robert Lerner, senior analyst at Current Analysis, says the rescinded plans could be advantageous for competitors looking to pounce on customer and prospect uncertainty. "There have been rumors for years that Firstlogic was looking to be acquired and there were suitors that were interested," Lerner says. "This is trouble because it confirms [those] rumors. This is a kick in the stomach. If I were a prospect, I'd want to know the longterm plans of this company and are they still looking to be acquired. I'd hold off or look at other possibilities." Meyer defended Firstlogic's position in the marketplace, noting that during the planned acquisition process the company announced OEM agreements with Business Objects, Informatica, and Siebel Systems, as well as a partnership with Cognos, and continued to grow license revenue. "We realized we had to continue business as usual to make sure if something didn't happen we were prepared as a company to move on," she says. Jill Dyche, Baseline Consulting partner and cofounder, supported Firstlogic: "I still think it's great news for Firstlogic and it puts one of the players back in the market," she says. "Their experience has shown Firstlogic will do what they continue to do whether they're acquired or not. They've been going along as if they're still a bona fide solid company. No matter what company happens to buy them, their tool won't go away." Is Firstlogic eyeing other potential buyers? "I haven't heard anything about a timeout, but it's not like we have a for-sale sign out," Meyer says. "We anticipate there will be interest shown and at that point, we'll evaluate if it makes sense or not. "With any company," Meyer says, "opportunities for acquisitions and mergers do come up. This is certainly not the first one to come to Firstlogic's attention, but it seemed to make a lot of business sense, there's a lot of synergy." Related articles: Data Quality Consolidation Continues
Pitney Bowes' move to acquire the remaining outstanding shares of Firstlogic is part of the latest wave of data quality consolidation. Pitney Bowes Will Acquire Firstlogic
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