Pivotal Corp. said Monday it has signed a definitive merger agreement with Chinadotcom Corp. unit CDC Software, scrapping an earlier agreement with an investment firm that planned to merge Pivotal with Talisma Corp., another maker of midmarket CRM (customer relationship management) software.
The announcement ended a month of uncertainty for Pivotal's customers, as several bidders made last-minute plays to acquire the financially struggling company. Pivotal agreed in early December to be bought by one of its investors, Oak Investment Partners, and merged with Talisma. Several days before a shareholder vote to finalize that deal, Pivotal rival Onyx Software Corp. made an unsolicited bid for the company. Pivotal executives dismissed that all-stock deal as inferior to Oak's proposed all-cash transaction, but as they fielded Onyx's overtures, CDC Software showed up with its own unsolicited bid, offering higher per-share cash payments than Oak did. After Pivotal initially rejected CDC's offer because of the proposal's many contingencies, CDC Software entered negotiations with the company and submitted the offer Pivotal has now accepted.
Barring any further twists, the deal will be ratified at a shareholders meeting in February. CDC Software will pay approximately US$59 million for Pivotal, whose shareholders can elect to receive either $2 cash for each of their shares or $1 cash and $1.14 in Chinadotcom stock.
Hong Kong-based Chinadotcom plans to use Pivotal's CRM technology as a component of the ERP (enterprise resource planning) suite CDC Software is constructing through acquisitions. The company recently purchased analytics and supply-chain management applications, and is working to complete by early next year a $69 million purchase of manufacturing industry ERP software vendor Ross Systems Inc. Including the customer bases of Ross and Pivotal, CDC Software will have 3,200 accounts worldwide, the company said.
Pivotal will operate as a separate business unit within CDC Software, and will remain at its current headquarters in Vancouver. CDC Software will continue developing Pivotal's software, the company said, and will also work to integrate it with other applications in the company's portfolio in hopes of cross-selling those applications to existing Pivotal customers. CDC Software also plans to expand Pivotal's footprint in the Asia-Pacific region, the territory on which CDC Software focuses.
Spurned suitor Onyx still hopes to woo some of Pivotal's customers. The company is offering a migration program allowing customers who purchased Pivotal's software before Nov. 12 and enrolled in Pivotal's maintenance program to trade in their Pivotal licenses for licenses of Onyx Enterprise CRM 4.5. Details on the program are at http://www.onyx.com/Pivotal/.