Mergers and acquisitions

After a brief but intense tug-of-war with rival SAP, Oracle succeeded in landing retail software maker Retek. The acquisition helps to flesh out Oracle’s capabilities in supply chain management but it came at a hefty price. SAP’s initial ‘agreed’ bid of $496 million was already a 42% premium on Retek’s stock market value, while Oracle’s final payment of $631 million underscored just how aggressive it intends to be in blocking SAP’s stated goal of controlling of 50% of the US enterprise applications market by the end of 2005.

Before the ink had dried on the Retek cheque Oracle had completed another buy-out. Oblix specialises in identity management software for providing users with authenticated, single sign-on access to applications – increasingly important in a service-oriented architecture. As such, the Oblix technology will be key in Oracle’s effort to fuse together some of the applications functionality it has amassed over the past six months, namely PeopleSoft, JD Edwards and now Retek.

Also recognising the pivotal role of identity management, systems and data management software company BMC paid $18 million for OpenNetwork, a specialist in identity federation services for web-enabled applications.

However, the real headline grabber in March was SunGard. The $11.3 billion buy-out of the provider of IT services to the financial services sector was remarkable in ways other than the hefty price. Of particular note was the fact that the deal was put together by an unusually large consortium of seven private equity investment firms, including Silver Lake Partners, Bain Capital and Goldman Sachs Capital Partners.

In targeting underperforming or undervalued companies, such levels of investment are beginning to have a major impact on the technology landscape. Private investors typically demand much greater financial returns from their companies, which can put pressure on R&D and result in previously unthinkable alliances.

Key IT industry acquisitions in March
Acquirer   Activity   HQ   Target   Activity   HQ   Price  
2e2 Group IT managed services UK XKO’s office IT svcs div Offshore IT services UK £13.3m
Affiliated Computer Servs Info processing svcs US Mellon’s HR outsourcing div Financial services US $445.0m
Akamai Technologies Online content delivery svcs US Speedera Networks Appln hosting/content del svcs US $130.0m
Allen Systems Group Systems &security mgmt s/w US Chevin Network performance mgmt s/w UK $1.8m
Allen Systems Group Systems &security mgmt s/w US Cypress Content/output mgmt s/w US n/a
Altiris IT management s/w US Pedestal Software IT security auditing s/w US $65.0m
BMC Software Data &systems mgmt s/w US OpenNetwork ID mgmt s/w US $18.0m
BT Telecoms services UK Radianz Financial services extranet svcs US $175.0m
Cognos Business intelligence s/w Canada Optima Analytical Solutions Financial perf mgmt s/w &svcs Spain n/a
CyberGuard Security s/w US Zix Security filtering s/w US $3.6m
Francisco Partners Private equity firm US NetIQ’s WebTrends unit Web analytical s/w US n/a
FST Technologies Documentation s/w &services UK Network Build Doc mgmt/cust comms s/w &svcs UK n/a
Getronics IT services Holland RedSiren IT security svcs US n/a
Google Search engine &services US Urchin Software Web analytics s/w US n/a
IBM Systems, s/w &IT services US Ascential Software Data integration s/w US $1.1bn
Juniper Networks Networking systems US Kagoor Networks IP comms systems US/Israel $67.5m
Multi-Channel Holdings Private equity firm US Blue Martini CRM software US $54.0m
NetScout Systems Net/appln perf mgmt s/w US Quantiva Appln perf mgmt analytics s/w US n/a
Novell Network/web servs/Linux s/w US Tally Systems IT asset management s/w US n/a
Oracle Database &applns s/w US Retek Retail software US $631.0m
Oracle Database &applns s/w US Oblix ID mgmt &security web access s/w US n/a
Phoenix IT Group IT services UK NDR Holdings Disaster recovery s/w UK £28.8m
Private Equity Buy-Out Finance consortium US SunGard Data Systems Finance sector processing svcs US $11.3bn
Quest Software Application management s/w US Wingra Technologies MS Exchange migration s/w US n/a
Redstone Comms service provider UK Xpert Group IP-based comms svcs UK £25.6m
Talisma Multi-channel CRM s/w US Hosted knowledge mgmt s/w US n/a
Tandberg Data Backup and recovery systems Norway Computer Design Group Backup appliances UK n/a
Technology Services Group IT svcs for SMEs UK Logical Solutions IT svcs UK n/a
Tibco Software Integration s/w US ObjectStar Mainframe integration s/w US n/a

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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