Golden Gate is paying around $54m for San Mateo, California-based Blue Martini to make it one of its portfolio companies. The offer represents a premium of approximately 63% over Blue Martini’s closing stock price on Monday.
On Nasdaq yesterday shares of Blue Martini jumped over 60%, to $3.88, following the takeover news. The offer values Blue Martini at $4 each in cash.
Technically the transaction is between Blue Martini and privately-held Multi-Line Channel Holdings which is the majority-owned by San Francisco-based Golden Gate and is also the parent company of Ecometry Corp, a retailing software vendor.
Both boards have already approved the deal. All that remains is an overall shareholder nod. Both parties are confident of wrapping up the transaction in the second quarter of this year.
The announcement marks the end of a difficult era for Blue Martini which took a pioneering approach to online customer interaction and merchandising when it was formed in 1998. Stressing personalized self-service, Blue Martini’s suite addresses several key verticals and phases of the customer management life-cycle.
Despite pocketing millions from a very successful IPO at the height of the dot.com boom, its been a slippery slope down for the once high-flying firm. The company has struggled financially, recently posting a fourth loss of $1.6m against miserly sales of $5.4m.
The writing seemed to be on the wall for Blue Martini when after its 2004 revenue continued to dip worryingly to $28.3m – from $32.6m a year ago. However the company has focused on narrowing its net loss – to $12.1m, from $17.6m in the prior year – perhaps with an eye towards making itself a more attractive acquisition target.
Blue Martini’s founder and current CEO Monte Zweben owns around 30% of the firm.
Blue Martini is the 25th technology company that Golden Gate has snapped up in the last four years, and its fifth software acquisition in the last two years.
