Illinois Tool Works has entered into a definitive agreement to acquire Click Commerce.
Illinois Tool Works plans to launch a tender offer by September 18, 2006 based on $22.75 per share, representing a 27% premium on Click Commerce’s closing price prior to the announcement. Both boards of directors have approved the proposed transaction, which is expected to close in the fourth quarter.
With seven acquisitions of its own over the past few years, marking it as a consolidator in its own sector, Click Commerce has grown, but remains a small player overall, with revenue of $59 million last year. However, it has seen growth recently as the concept of the demand-driven supply chain has caught on with end-user organizations, leading them to invest in collaborative applications that connect the supply chain and RFID technology.
Illinois Tool Works, meanwhile, has annual revenue of $12.8 billion, 700 business units across 48 countries, and 50,000 employees. It said that it views Click Commerce as a platform for growth, and that the acquisition will enable Illinois Tool Works to expand its operations in the manufacturing and industrial sectors.
Acquisition by a manufacturer instead of a fellow software vendor is a mark of the depth of the problems vendors in the sector are facing as the market for independent supply chain management (SCM) and partner relationship management (PRM) solutions dries up.
There has already been mass consolidation within the sector, which differs from the outright SCM market represented by i2 and Manugistics because it addresses collaboration within the enterprise and across the extended enterprise and embraces order to sales processes including pricing and configuration management as well as more traditional supply chain management activities.
