Expanding its supply chain execution software portfolio, HighJump Software today disclosed that it has acquired Pinnacle Distribution Concepts Inc., a provider of on-demand, Web-based transportation management software (TMS) and services. Terms of the cash deal were not disclosed.
By acquiring Pinnacle, HighJump vaults into contention in the highly fragmented TMS market, a segment whose stature has soared with the escalating importance of global supply chains and skyrocketing energy costs. The deal is HighJump's first acquisition since it itself was purchased by 3M Co. two years ago, and represents HighJump's entry into the on-demand software space, according to Paul Steen, the Eden Prairie, MN, company's vice president of marketing and alliances.
In an interview, Steen said HighJump was attracted to the Knoxville, TN, company's heritage in transportation management software and experience with on-demand application services delivery (Pinnacle operates its own Tier-1 hosting center), where it already serves a wide swath of large and mid-size manufacturers such as Becton Dickinson, Avery Dennison, Yamaha Motor, General Electric, Schneider of Hanover, and Belden Wire & Cable. "There are plenty of places we could have looked for on-demand [TMS]," Steen said, but "the fact that Pinnacle has well over 150 sites [using the software] was a real attractive quality."
Pinnacle's President Bryan McKenzie said his decade-long relationship with HighJump CEO Chris Heim helped cement the deal. "Getting associated with a company like HighJump and 3M will give us product exposure we couldn't otherwise have," McKenzie added.
Not only does his 14-person, profitable company fit neatly with HighJump on a cultural level, but it also works on a technology level, McKenzie said. Under terms of the deal, Pinnacle's FreightLogic application service, which handles load planning and logistics management with third-party shipping companies, will become part of HighJump's Microsoft .NET-based Supply Chain Advantage Suite, an integrated portfolio of RFID-enabled software for warehouse, transportation, and yard management, among other things.
Because both companies' offerings have underlying architectural similarities -- Microsoft foundation technologies -- functional integration should be easier. Pinnacle, moreover, has become quite accomplished at systems integration, since its customers usually present different technological challenges. The only difference with HighJump is the need to integrate at a higher level with a full suite of SCE applications, McKenzie noted.
"We should have a usable phase-one integration by the end of the month, and then enhance it as time goes on," he promised.
That will be critical as HighJump pursues entrenched players in the TMS space such as Descartes, which has successfully turned around its business after switching to an on-demand model, Manugistics (which was recently acquired by JDA Software), and others such as Manhattan Associates and Red Prairie. Oracle, in fact, segued into the TMS segment last fall when it purchased G-Log , which provides an on-demand offering. Even SSA Global, which recently agreed to be acquired by Infor, offers its TMS software module as a hosted application service.
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