Fremont, California-based Appshop will bring $23m a year in revenue and boost USi’s 105 existing customers by 40, claims USi, which will take on about 160 employees from Appshop after laying off between 20 and 30. USi works with ISV partners including PeopleSoft, Siebel, Ariba, Broadvision, Vignette and Microsoft Exchange. Appshop will bring the first instance of Oracle ASP expertise into the company.
The acquitision comes less than two weeks after USi bought Chicago, Illinois-based management consultant Strong3 Inc to add consulting expertise to its Ariba’s spend management hosted software service. Terms of that deal were not disclosed. In June 2003, USi acquired CoreHarbor, an Ariba-focused managed services company, which helped USi’s Ariba business grow 67% over 2003, claims USi.
USi, which was acquired out of bankruptcy by Bain Capital in January 2002, released selected financial data in February 2004 claiming that it generated earnings before interest, tax, depreciation and amortization of $5.6m. It also claimed that its cash position stood at $27.9m at the end of 2003. The company did not give any information about its revenue growth over the year. USi will reportedly pay $5m in cash and exchange 22.7% of the privately held USi’s stock for Appshop. Bain Capital LLC owns 82% of USi, and Grotech Capital Group Inc owns about 12%. One of Appshop’s investors, 3i Group Plc, will appoint a new member to USi’s board.
