Continuing its corporate strategy of acquiring companies for specific products and capabilities, Exact Software said today that it has acquired Vanguard Solutions Group, a provider of business intelligence software. Terms of the acquisition weren't disclosed.
Exact Software, the North American division of Exact Holding N.V, Delft, the Netherlands, has had a strategic partnership with Vanguard for more than a year. That partnership led to the development of Exact Business Analytics, a business intelligence product for Exact's Macola ERP line, in October of 2004.
In an interview, James P. Kent, Jr., chief executive of Exact Software North America, said that there were two main reasons Exact decided to acquire Vanguard. The first is that business intelligence capabilities have become a mandatory part of an enterprise ERP sale. The second, he said, was to accelerate the adoption of the Exact Business Analytics product into the market. About 20 licenses of the product have been sold since its introduction a year ago, he noted.
'There are also new site opportunities with Vanguard as both a dashboard and BI tool," Kent said.
Going forward, Kent said that Exact plans to offer the Exact Business Analytics product with its Exact Globe Enterprise multinational ERP product, which has been available in Europe for many years but which is now just being introduced to the North American market, and e-Synergy, its web-based collaboration product.
The company's three other ERP product lines -- JobBOSS, MAX and Alliance/MFG -- may be considered, although these products, Kent noted, serve different markets.
Vanguard, a privately-held company with 32 employees, has about 125 customers of its BI product, which is called the Graphical Performance Series. Anthony Balio, Vanguard's president and CEO, will join Exact Software's executive team. Vanguard is based in Chicago.
It was in the windy city one week ago that Exact held its annual user conference, Engage, which drew about 900 attendees. In a keynote speech, Kent described the ERP market as "tough" and one in which large software vendors have been moving into Exact's mid-market space, sometimes through market share acquisitions which he said were not adding value to customers.
The company's strategy, he said, is to acquire companies for specific capabilities that support Exact's "solution strategy." That strategy consists of enhancing products by business type and industry segment, continuously improving data and process integration, adding specific technologies that span its core products, adding products that expand Exact's market coverage, and gaining human resource expertise.
Since the summer, Exact has acquired three other companies. On August 29, Exact said it took a majority interest in Modulair Easy Access B.V., a logistics and warehouse software firm. And on June 8, Exact acquired Kooijman Software, a software provider to construction and education organizations, and AllSolutions, a software provider to non-profit and service organizations.
The acquisitions follow the appointment of Rajesh Patel as corporate CEO on July 1 and the announcement of the company's financial projections on April 7. In a keynote at the Engage conference last week, Patel said that Exact was firmly focused on the mid-market and that a core part of the company's growth strategy is not to be "distracted by digestion or integration issues" caused by acquisitions for market share purposes.
"We have no ambition to climb up the market," he said.
In its April financial forecast, Exact said it expected revenue of €235 million to €240 million in 2005, but Kent said last week that this number was revised in July to €218 million to €222 million. In 2004, revenues were €212 million, up from €206 million. Net income was flat at €33 million, compared to €32 million the year before.
Kent said he expects the North American unit to do about $64 million in 2005, compared with $59 million in 2004.
Meanwhile, Kent said in Chicago that Globe will be in controlled release in North America through this year. The effort behind launching Globe had resulted in Exact Software pushing back acquisition plans in 2005. There are currently 15 test sites for the product, with a goal of 20 sites going in during 2006. General availability of the product will be in the beginning of 2006, Kent said.