SBI to Acquire Lante for $1.10 a Share
SBI to Acquire Lante for $1.10 a Share
SBI and Co. today continued its Web boutique acquisition spree, announcing plans to acquire Lante Corp.
The move comes just two days after SBI announced plans to acquire financially strapped Scient Inc. SBI said it is tendering its offer to acquire Lante for $1.10 a share--a 100 percent premium over yesterdays closing price.
Separately, Lante announced at the close of markets today that it is laying off approximately 22 percent of its workforce, or 45 employees.
The Salt Lake City-based SBI valued the deal at about $41 million. The company is not taking on any debt in the process but is instead relying on its venture capital backers to finance the acquisition, officials said.
"These businesses weve pulled in will be immediately profitable within the SBI umbrella," said Ty Mattingly, vice president of corporate development at SBI in Salt Lake City. "We fully expect to run these businesses profitably day one."
Mattingly said that Lante has "quite a bit of cash" and is on a path to profitability. Some 100 to 150 Lante employees will transition to SBI when the acquisition closes in the third quarter of this year, and SBI will acquire about 50 Lante clients.
Lante will bring greater geographic coverage to the table with its Chicago headquarters and offices in Seattle, Dallas, Houston and New York. At the same time, it will bring a greater focus on the energy/chemical vertical market segment, Mattingly said.
Both the Lante and Scient acquisitions will bring greater breadth to SBIs services offerings.
"We now have a business thats geographically balanced, strong in six verticals, we do business process optimization at the high end and we have strong technology offeringsespecially web services, .Net and J2ee capabilities with Scient and Lante. It is a hypey marketplace, but we have real projects that have engaged with customers in helping to migrate to a .Net or Java web services strategy," he said.
SBI to Acquire Lante
Specifically, Lante brings services in the areas of extended enterprise framework development, business-to-business integration, enterprise application development, as well as portals, content management and business analytics.
SBI in a fire sale acquisition string similar to that of Divine Inc., had already acquired some assets of MarchFirst and acquired Emerald Solutions Inc. in Portland, Ore.. But SBI officials maintain that Divine is taking a riskier approach.
Divine Inc. as a publicly held company has made a string of acquisitions while operating at a loss.
"Our approach is more pragmatic we too have a software business that adds value to the services we deliver. We have business process optimization software thats an add-on to the solutions weve delivered. Divine is trying to create a services business around the next ERP type application," said Coleman Barney, senior vice president and cofounder of SBI.
Few of the Web boutiques whos fortunes rose and fell swiftly when the dotcom bubble burst are left as independent companies. Divine is in the process of completing offer to buy Viant Inc. Sapient and Razorfish remain as battered, but still independent companies.
"Sapient has been hit really hard, but they are still a good company. Razorfish made a profit last quarter, but they have some challenges," said Mark Tebbe, Lante cofounder in Chicago.
Tebbe is pleased with the deal struck with SBI. "We got the opportunity to team up our clients and employees with a company that has good management. For us, getting out of the spotlight of being a publicly owned company is a good thing," he said.
SBIs moves are intended to position the company for fast growth when IT spending picks up, although officials asserted that its acquisitions will be profitable from day one. Its strategy to offer a more diverse range of services could pay off when and if the recovery starts. "With professional services, you have to have a way to go back and sell more work to existing clients. You build relationships with existing clients, learn more about them and then go back and sell additional projects that capitalize on the relationship and the knowledge," said Jim Shepherd, senior vice president of AMR Research Inc. in Boston.
SBI has a diversified business model and is much healthier than other independent boutiques, he added.