CDC Software, a provider of enterprise software applications and services, said that it has signed a binding term sheet to acquire software as a service (SaaS) provider for the not-for-profit (NFP) market, in a move that launches its SaaS acquisition strategy and increases its market expansion in this new vertical.
According to CDC Software, the transaction expands its plans to acquire on demand companies that can be rolled up into one SaaS software provider complementing its on-premise offerings in similar vertical industries, such as NFP.
With its global infrastructure and market footprint, CDC Software plans to launch this SaaS offering worldwide through its more than 22 offices and its 1200 resellers and partners around the world. This is the first of other potential SaaS acquisitions that the company expects will enable it to offer customers more deployment options, such as on-premise and on demand offerings that fit their business requirements.
The company said that its customers can automate constituent communications and development, member services, constituent-to-constituent collaboration, ERP, CRM, financial management, transaction processing and e-commerce all from a single platform.
The acquisition is also expected to generate new cross-selling opportunities for CDC MarketFirst and CDC Respond which will extend this company’s product functionality into the areas of marketing automation, lead management and complaint and feedback management.
The announcement marks the latest of several strategic initiatives undertaken by CDC Software. Last quarter, CDC Software has completed the acquisition of supply chain event management software provider WKD Solutions and signed an agreement to acquire up to 51% of Hejia Software, an ERP software provider based in Beijing.
Earlier this month, the company has also signed a binding term sheet to acquire business intelligence software provider for manufacturing in an all cash transaction, which the company believes will help expand its market share in food and beverage, consumer packaged goods (CPG) and automotive markets.
Bruce Cameron, president of CDC Software, said: “This planned acquisition is a milestone for us in terms of its fit with our SaaS strategy, expansion into a new market, the disciplined valuation and its potential to be earnings accretive.
“We also believe that this business will grow strongly in the future as we leverage our global scalable business and technology platform with their SaaS technology. We feel this combination will help position us as a leading SaaS solutions provider in the NFP space.”
The acquisition is subject to several customary closing conditions, including the execution of definitive documentation related to the acquisition, the receipt of all requisite approvals and consents, and the satisfactory completion of due diligence by CDC Software. The acquisition is expected to close in the fourth quarter of 2009.
