Business intelligence software vendor Business Objects S.A. today announced plans to acquire privately held performance management software vendor Cartesis S.A. in a deal worth 225 million euros (approximately $300 million U.S. dollars) in cash.
Business Objects, with dual headquarters in Paris and San Jose, Calif., has been building out a performance management suite for about three years, since its 2005 acquisition of performance management vendor SRC Software Inc., according to CEO John Schwarz during a press call this morning. The acquisition of Cartesis S.A., with dual headquarters in Paris and Norwalk, Conn., will give Business Objects "best in class" features for financial consolidation and reporting, he said. It's functionality that the company hopes will help it compete more formidably in the performance management software market.
Business Objects: Cartesis customers will benefit
Business Objects is committed to supporting Cartesis customers, Schwarz said. It boasts about 42,000 customers worldwide, while Cartesis has about 1,300, including Citizens Bank Corporation, Cargill, Nissan, PepsiAmericas and Sysco. Schwarz said both companies' customers will benefit from the combined performance management suite. Business Objects plans to integrate the two vendors' features for enterprise planning, budgeting and profitability management in the suite, he said, while adding in Cartesis's financial consolidation and reporting functionality. Business Objects' integrated data model is a differentiator, he said, as is its underlying platform.
"We believe that being standards-based, independent of transactional and other operational data systems, and being able to cover all of the data in the enterprise, and beyond the enterprise, is where the differentiation comes between us and our competition," Schwarz said.
Analyst: Lots of product integration ahead
The acquisition is likely a "knee-jerk reaction" to the Oracle-Hyperion deal, according to Gerry Brown, senior analyst with Towcester, U.K.-based Bloor Research International Ltd. While it may help Business Objects get deeper into the combined BI and performance management market and compete more directly with Oracle, there will be some significant product integration required to deliver a unified suite, he said. Cartesis acquired several products in a series of small 2005 acquisitions and is still in the process of integrating its own portfolio.
"Cartesis has been trying to integrate their products and flesh out a platform, and Business Objects has been doing the same thing," Brown said. "These are two sets of products that look very similar from the outside, so they'll need to do some severe product rationalization."
But Business Objects will benefit from the services arm of Cartesis, which includes several hundred financially savvy consultants, he said. Professional services are often required for financial consolidation implementations, Brown explained, and that's something Business Objects will need as it expands its performance management products and reaches out to more chief financial officers.
Cartesis will become a part of the Business Objects Enterprise Performance Management product line organization. Mark Doll, senior vice president and general manager of Global Services and EPM for Business Objects, and Didier Benchimol, CEO of Cartesis, will lead the integration efforts, according to the press release.
The deal is expected to close within 90 days and is subject to regulatory approval and other customary closing conditions.