The move came after Business Objects shareholders at a shareholders’ meeting in Paris, France approved the transaction. The total value of the transaction has risen to $1.2bn from $820m, and the combined company now has over 24,000 customers.
Under terms of the acquisition agreement, Business Objects will issue approximately 26.8 million ordinary shares, based on the treasury share method, in respect of Crystal Decisions common shares and stock options outstanding immediately prior to the closing, and will pay approximately $307.6m in cash to former Crystal Decisions stockholders. Based on the closing price of Business Objects’ shares on the last trading day prior to the closing, the aggregate value of the transaction is approximately $1.2bn.
This acquisition creates the clear leader in business intelligence, with the largest customer base, the strongest product line, and the highest revenue in the sector, said Bernard Liautaud, chairman and chief executive officer.
In terms of product lines, distribution channels, and international presence, the combination of Business Objects and Crystal Decisions is extremely complementary, and delivers strength across the board. We can now offer our customers the de facto standard product in reporting, the market’s leading interactive query and analysis solution, and world-class enterprise performance management products for score carding and dashboards, said Liautaud.
The completion of the merger has created one of the biggest business intelligence (BI) companies with over $736m in combined revenue, 3,800 employees, over 24,000 customers, and over 20 patents (or patents pending). It has propeled Business Objects above archrival Cognos Inc, which reported $551m in revenue in 2002, and which had consistently topped several industry analyst BI charts as the largest vendor by market share. Specifically, the deal will strengthen Business Objects’ foothold in the enterprise reporting market; a segment of the BI market that Crystal dominated with its Crystal Reports authoring tool and Crystal Enterprise platform products, which have amassed over 14 million licenses worldwide.
While the merger looks good on paper, there will need to be some careful integration at product, sales and cultural levels. The signs are encouraging however, as Business Objects did a sterling job of assimilating Acta’s technology, sales team and developers into its fold. Business Objects has said it will detail in early January its plans for combining the companies’ operations and integrating their software product lines.
Few could have predicted Business Objects’ move for Crystal considering the bitter rivalry that often surfaced between the two companies, as well as Crystal’s announcement in May that it had filed for a $172.5m IPO, which has now been cancelled.
As Crystal Decisions was a privately held concern, it was relatively unknown on Wall Street and the investment community at large. But based on its publicly declared figures, Crystal appeared to be financially sound. The company achieved eleven consecutive quarters of steady growth, and had a net margin of 14%, much higher than Business Objects’ margin of 9%. Last year in 2002, Crystal’s revenues totaled $271m, versus Business Objects $466m.
The only dark cloud on the horizon was last week’s news that rival MicroStrategy Inc had filed a lawsuit against Crystal Decisions, alleging it infringed three of its key patents. The McLean, Virginia-based company said the patents concern the control of report generation using a Web browser, the management of an automatic online analytical processing report broadcast system, and providing BI reports to Web users without downloaded applications.
MicroStrategy is seeking triple damages, attorney’s fees, and an injunction to prevent Crystal Decisions from making, using, or selling several software products that allegedly infringe its patents. The products concerned are Crystal Enterprise, Crystal Reports, Crystal Analysis, and Crystal Applications.
This article is based on material originally produced by ComputerWire.
