Pegasystems, a provider of business process management (BPM) software offerings, has entered into a definitive agreement to acquire customer relationship management (CRM) software and services provider Chordiant Software.
Under the terms of the agreement, Pegasystems will make a cash tender offer of $5.00 per share for all outstanding shares of Chordiant common stock for a total purchase price of up to approximately $161.5m, assuming all outstanding shares are tendered.
Alan Trefler, founder and CEO of Pegasystems, said: This combination creates a broader portfolio which will offer an expanded client base new capabilities to meet next-generation CRM needs. We are excited to add Chordiant’s technology and domain expertise to bolster our previously announced investment plans in BPM and CRM.
According to Pegasystems, the combined company’s expanded global customer base, can now take advantage of the complementary offerings. Chordiant clients will be able to incorporate Pegasystems intent-driven process automation to enhance customer experience in their existing foundation while Pegasystems’ clients can take advantage of Chordiant’s predictive decision management offerings, CRM assets and expertise in customer experience.
Chordiant reported revenue of $76.3m and $52.3m of cash and investments for its four quarters ended December 31, 2009. The boards of both Pegasystems and Chordiant have approved the definitive agreement.
Craig Dynes, CFO for Pegasystems, said: We expect this acquisition to be accretive, but under the new purchase accounting rules, transactional costs are now expensed rather than included in the calculation of goodwill.
Accordingly, significant closing costs, integration expenses and other purchase accounting valuation charges will be dilutive to GAAP reported earnings.”
The transaction, which is subject to customary closing conditions, including regulatory approvals, is expected to close in the second calendar quarter of 2010.
