5 September 2002 Portal specialist Plumtree Software has received a take-over bid from a San Francisco, California-based investment fund, Sutter Opportunity Fund 2 (Sutter).
Plumtree has said it is considering the acquisition. However, Plumtree appears to be in rude health with its revenues growing strongly and a cash pile of $63 million (€63.1m) and the bid scarcely looks enticing for stockholders.
In a letter sent to Plumtree CEO John Kunze, Sutter made an unsolicited offer to acquire all outstanding shares of Plumtree for $2 with an agreement to pay an additional $3 per share in five years time. Plumtree said it had not had any contact with Sutter before it received the bid.
Sutter has bid for several companies in the past two years, mostly real estate investment trusts. However, analysts say that many of these offers have been unsuccessful. It is therefore unclear how serious Sutter’s bid for Plumtree is, or exactly what its motives are.
Plumtree’s share price rose after Sutter’s bid, but fell back later in the day.
Plumtree has grown fast in recent years. In 2001, Plumtree’s revenues rose 135% to $80.4 million ($80.5m), up from $34.1 million (€34.1m) in the previous year. The company has more than 300 customers using its corporate portal software, including consumer goods giant Procter &Gamble, pharmaceuticals maker Pfizer and car manufacturer Ford.
“More than 14 of the Fortune 500 companies use Plumtree. No one is closing more business than us,” boasts Plumtree co-founder Glenn Kelman.
Nevertheless, some analysts have tipped Plumtree, which listed on the US Nasdaq in June 2002, as a prime acquisition candidate because they doubt the long-term strength of portal software as a standalone product. Other pure-play portal vendors such as Epicentric are up for grabs too, they believe.
Analysts expect widespread consolidation in the growing corporate portal software market. In 2001, organisations spent about $461.2 million ($461.8m) on portal software, a 57% jump on the previous year. In this market, Plumtree competes against Epicentric, Vignette, IBM, PeopleSoft, Oracle, BEA Systems and BEA Systems.