30 April 2004 Systems management specialist BMC Software is to purchase so-called ‘push’ software maker Marimba for $239 million in cash.
The purchase reflects the continuing consolidation of the software market and follows the acquisitions of rivals NovaDigm and On Technology by Hewlett-Packard and Symantec respectively. However, the amount BMC paid for Marimba came as a surprise: The deal represents a hefty 69% premium for the company.
Marimba’s software will compliment BMC’s Remedy service and support applications, said BMC CEO Bob Beauchamp: “The combined technology offers customers a complete solution that focuses on business and IT alignment solutions that reduce cost and business risk.”
The news comes in the wake of Marimba’s first quarter results, in which revenues fell from $10.1 million to $8.3 million. Despite this, revenues in 2003 increased 15% to $40.9 million and the company had more than $50 million cash in the bank at the end of December.
In contrast, BMC reported fourth quarter revenue of $400.2 million, compared to $380.7 million in the same period a year ago, a result that disappointed investors. Total revenues for fiscal 2004 weighed in at $1.42 billion.
Marimba was founded in 1996 with the aim of making ‘push’ software — software designed to send customised information to desktop PCs over the Internet.
However, that was abandoned because the company could not devise a workable business model for such a service — in common with the slew of push software start-ups of the time, such as Pointcast. Instead, Marimba re-worked its software to enable it to deliver automatic software updates.
The company finally went public in 1999 at the height of the dot-com and technology stock frenzy. The company had been for sale for some time and the bidding was “very competitive”, according to a spokesperson from Jefferies &Company, which advised Marimba on the deal.