In a marked expansion of its enterprise applications rollup strategy, Made2Manage Holdings Inc., the holding company of ERP vendor Made2Manage Software Inc., today disclosed an agreement to buy stand-alone CRM software vendor Onyx Software Corp. in a cash transaction valued at $92 million.
The deal trumps a hostile bid pushed by rival enterprise software consolidator CDC Software of Atlanta, which earlier this year sweetened its offer from $50 million to $80 million for Onyx of Bellevue, WA. In a prepared statement, Eric Musser, CDC Software's executive vice president of strategy, said his company remains committed to expanding its CRM and related enterprise software and service offerings through acquisition and organic growth, but did not address the status of CDC's bid for Onyx.
"Today's news has no impact on our strategy or our mission to deliver the best, world-class applications to meet the needs of customers around the globe," Musser said.
A CDC Software spokesperson declined to say whether the statement meant that the Atlanta company had decided to end its bid for Onyx. Earlier public statements by Musser indicated that CDC had made what it believed was a fair offer and would move on if Onyx did not agree to its terms.
While awaiting Onyx's response, CDC acquired c360, a provider of Microsoft Dynamics CRM development tools and plug-in applications. CDC Software also owns Pivotal Corp., another CRM software vendor.
In an interview with Managing Automation, Jeff Tognoni, chief executive officer of both M2M Holdings and Made2Manage Systems, said he couldn't predict CDC's next move, but was confident his company's acquisition offer would move toward completion since it had the backing of Onyx's board -- unlike CDC's proposal.
In fact, certain members of Onyx's board and management team representing approximately 17.6% of the company's outstanding shares have already entered into voting agreements in support of the acquisition, Onyx and Made2Manage said in a joint statement. The deal is expected to close in the third quarter, pending approval by a majority of Onyx's shareholders, the two companies noted.
Investors of both Onyx and CDC appeared to applaud the deal for different reasons. The $4.80 per share offer was seen as a reasonable premium for Onyx's stock, which began the day trading at $4.71, up 54 cents from yesterday's close. Today's closing price of $4.68, was a 12% jump on what was a down day on Wall Street. CDC investors, meanwhile, didn't seem disappointed that the division of Hong Kong-based CDC Corp. had apparently moved on. The stock of its parent company closed the day at $4.54, up two cents on the day.
The acquisition of Onyx would represent an expansion of the M&A strategy of private-equity-backed Made2Manage, which over the last 20 months has purchased five companies that offer ERP applications to manufacturers in underserved micro-vertical markets. These markets include manufacturers of printed circuit boards as well as metals and wire & cable and engineer-to-order (ETO) products.
Onyx, Tognoni said, would be the linchpin in the next stage of the Indianapolis company's roll-up plan: to acquire undercapitalized CRM software vendors. It plans to continue targeting micro-vertical ERP vendors, as well. "We will be aggressively putting capital behind [Onyx] and moving forward with [a plan to advance] further consolidation in the CRM market," he said, "Onyx will be the platform that we do it with."