Combining one company's focus on XML (Extensible Markup Language) application development with the other's vertical market consulting and services strengths, eXcelon Corp. and C-bridge Internet Solutions Inc. announced Wednesday that the two Massachusetts technology companies will merge.
Under terms of the stock-swap deal, each outstanding share of C-bridge common stock will be converted into 1.2517 shares of eXcelon common stock. Shareholders from each company will own 50 percent of the combined company.
The new company will set its sights on the Enterprise Commerce Management (ECM) market that encompasses ERP (enterprise resource planning), CRM (customer relationship management), online procurement, supply chain management (SCM), private trading exchanges (PTXs) and even Consortium Trading Exchanges (CTXs).
"If you have the industry expertise of C-Bridge and the product expertise of eXcelon, you can go into the senior levels of management and demonstrate to them how you can show them a return on investment and lower their total cost of ownership of these new applications; and offer to them a very high-level solution in this new ECM space," said Bob Goldman, eXcelon chairman and chief executive officer (CEO), during a conference call and Webcast. "That really is what we are about. We see a real opportunity here of creating a new solution company that is product focused but selling the solution to the ECM application arena."
After the merger is completed, the new company will be called eXcelon Corp. with Joe Bellini serving as CEO. He is currently CEO of C-Bridge. Goldman will be as the chairman of the board of the merged company.
Burlington, Massachusetts-based eXcelon and Boston-based C-Bridge will combine to have more than 700 employees. The merged company will have 2001 projected revenue of more than US$100 million and cash reserves of more than $50 million. The two companies will together have about 1,500 clients. Goldman said the goal is for the combined company to reach profitability by the fourth quarter 2001.
Like many companies in the consulting services market, C-Bridge has had to weather a downturn in business in recent months. C-Bridge, which offers consulting services focused on the vertical markets, laid off 95 employees in January, 105 in March and another 90 job cuts were announced on April 26. The company also reported a net loss of $12.4 million for its first quarter ending March 31, according to a company statement. The company was founded in 1996 and generated more than $80 million in revenue during fiscal 2000, Goldman said.
Excelon, meanwhile, until January 2000 was known as Object Design, which was an object database vendor. The 12-year-old company continues to have an Object Design division but also provides software that helps organizations in the manufacturing, financial services and insurance markets build and deploy XML applications so employees can access data from any location. The software products company generated approximately $70 million in revenue during 2000, Goldman said. However, the company posted a net loss of $5 million during the first quarter ending March 31 compared to a net loss of $700,000 during the same time last year.
The ECM market, which the new company will enter, is expected to exceed $27 billion by 2001, according to an AMR Research Inc. report released in April.
The merger is expected to be completed in about three months after shareholder and U.S federal regulatory approval is gained, Goldman said.