Its swoop comes less than four months after Firstlogic’s proposed merger with postal automation giant Pitney Bowes Inc was canceled, and follows a spate of consolidation activity in the data quality software space.
The deal is worth around $69m in cash and is expected to close in the second quarter of this year. Business Objects said the transaction will add to its 2006 results before one-time charges and accounting adjustments. This means that, on a net basis at least, the acquisition will soften Business Objects’ results for the year.
Although Business Objects has partnered with Firstlogic since early 2004, having a data quality technology directly under its wing will directly benefit its exisiting BI and data integration solutions.
We expect this acquisition to help customers build a stronger BI infrastructure, said Eric Lieberman, president of Lacrosse, Wisconsin-based Firstlogic.
As part of the announcement, Business Objects has also expanded an existing reseller agreement with Firstlogic, allowing it to resell Firstlogic’s data matching and consolidation technology which is already integrated into BusinessObjects’ Data Integrator ETL platform.
While specific details of how Firstlogic’s data quality products will be integrated into the rest of Business Objects’ products have yet to be mapped out, officials say that core data quality capabilities will be added to the existing product line up and are also likely to continue to be sold as a standalone solution.
The technology also fits nicely into Business Objects overarching strategy providing enterprise information management — which aims to deliver a single, consistent and trusted view of business information to drive better and more accurate decisions.
According to Business Objects, EIM is about helping companies improve the reliability of corporate data, to help them comply with things like regulatory requirements.
Building a BI strategy without a complete EIM solution is like trying to complete a puzzle without all the pieces, said John Schwarz, CEO of Business Objects. With today’s acquisition of Firstlogic, Business Objects acquires one of the most important pieces of the EIM puzzle – data quality.
Founded in 1984, yet still privately-held, Firstlogic was one of the few remaining data quality independents left in the market following a wave of consolidation over the past several years that saw Similarity Systems Ltd snapped up by Informatica Corp for $55m last month and Group 1 Software was bought by Pitney Bowes Inc in 2004.
Before that, in 2002, analytics software firm SAS Institute Inc bought Dataflux Corp and Ascential Software Corp (now part of IBM Corp) bought Vality Technology Inc.
Additionally, specialist data profiling vendors like Avellino Technologies Ltd and Evoke Software Inc were also absorbed into larger data quality suites from Harte-Hanks Trillium Software Inc and Similarity Systems in 2004 and 2005 respectively.
Only a handful of pure-play data quality vendors now survive in the market including: Datanomic Ltd, Datamentors Inc and KDI Solutions Inc. Most of these are small niche players.
Arguably this is a defensive ploy by Firstlogic, which pulled out of a proposed merger with Pitney Bowes late last year. And Informatica’s recent acquisition of rival data quality firm Similarity was also another blow for the company as it signaled the end of a long-standing (and lucrative) OEM relationship that had existed between the two firms since 2002.
Firstlogic is believed to have reported revenues in excess of Pm last year and employs around 400 staff – at this stage its not – at this stage its not clear if all staff are being bought on board.
Business Objects also inherits over 6,000 Firstlogic customers worldwide, some of whom also use rival BI firms. The future of Firstlogic’s relationship with arch-BI rival Cognos Inc now looks doubtful to continue.
