Cognos has agreed to acquire its smaller business performance management (BPM) and business intelligence (BI) software rival Applix for $339 million in cash – or $306 million after discounting Applix’s cash on hand.

Cognos cited Applix’s advanced online analytical processing (OLAP) technology as its chief attraction, as well as the company’s solid customer base that will add a significant number of new customers to Cognos’ CRM database.

Analyst reaction is mixed. On Wall St, some commentators have been surprised by the five-times annual sales price paid by Cognos, which looks expensive compared to the $300 million, just 2.4 times sales, that Business Objects paid for Cartesis earlier this year.

Other commentators defended the price, pointing out that attractive M&A targets have become thin on the ground as the BI and analytics market has consolidated, making Applix a last chance opportunity for Cognos to differentiate itself in an increasingly me too market.

David Kasabian, an analyst with AMR Research, offered the ironic angle that, should the deal go through in the fourth quarter as expected, Cognos might itself become a more attractive bid target for one of the remaining BPM and BI heavyweights, such as Microsoft, Oracle, Business Objects, or SAP.

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Further reading

BUsiness Objects hangs on to the hunt