Hyperion Fires Back With Brio Acquisition

Move comes just days after Business Objects acquired Crystal Decisions Inc.

Speculation has swirled in Silicon Valley all week that Hyperion Solutions Corp. will acquire a business intelligence software vendor after Business Objects SA announced its acquisition of Crystal Decisions Inc. last Friday.

On Wednesday afternoon, Hyperion, of Sunnyvale, Calif., answered the speculation, announcing plans to buy Brio Software Inc. in a cash and stock deal valued at approximately $142 million.

Under the terms of the agreement, Brio shareholders will receive a combination of 0.109 of a share of Hyperion common stock and $0.363 for each share of Brio common stock they own. The boards of directors of both companies have approved the deal, which now awaits regulatory and shareholder approval. Its expected to close by the fourth quarter of the calendar year.

"With Brio, we will gain one of the most innovative and pioneering companies in business intelligence, and our customers will gain integrated query, reporting and analysis tools that are renowned for their ease-of-use, quick deployment, scalability and remarkable power," said Hyperion Chairman and CEO Jeff Rodek in a statement.

Rodek said the move was unrelated to Business Objects acquisition of Crystal.

"We didnt craft this deal in four days," said Rodek, during a conference call with analysts.

But the acquired Brio technology will replace an OEM agreement Hyperion had with Crystal Decisions for enterprise reporting and business intelligence technology, Hyperion officials confirmed. Business Objects, which brought Crystal, competes directly against Hyperion in the business performance management space.

Rodek said the deals were different, however.

"The Business Objects move was made to strengthen their business intelligence position. Our focus is on business performance management," he said.

In advance of the deal, Hyperion signed a separate OEM agreement with Brio Wednesday. Under the terms of the agreement, Hyperion will immediately begin reselling Brios enterprise reporting, query and analysis, and dashboarding capabilities to Hyperion customers. The company will offer a migration path to those customers who use Crystal Decisions products, officials said.

"We will continue to maintain, sell and develop the Brio product line," said Hyperion President and COO Godfrey Sullivan, who said Brios products would also be fully integrated with the Hyperion products.

Both companies also reported quarterly earnings Wednesday. Hyperions revenues in its fiscal fourth quarter, ended June 30 were up slightly, from $135.8 million to $138 million, though license revenues dropped from $61.1 million to $55.6 million. Net income increased however, from $6.2 million to $9.2 million.

Brios revenues in its fiscal first quarter, ended June 30, fell from $26.1 million to $24.8 million, with license revenue down from $12 million to $8.6 million. The Santa Clara, Calif.-based company lost $2.1 million after a $1.8 million profit in the same period last year.