Investment Firm to Acquire Pivotal

Oak Investment Partners will acquire Pivotal and merge its operations with fellow CRM software developer Talisma.

Private equity firm Oak Investment Partners will acquire Pivotal Corp. and merge its operations with fellow CRM software developer Talisma Corp., Pivotal announced Wednesday.

Oak Investment Partners, which has invested—and sometimes divested—in such technology companies as Compaq, Inktomi, InterNAP, Polycom, Primus, Seagate, Sybase and Divine, will pay $1.78 per share for Pivotal, plus an additional consideration of up to 3 cents per share based on the companys financial performance up to Oct. 16. The total value of the deal could be more than $47 million.

The deal is expected to close by November or December. Once the deal closes, Pivotals operations will be merged with privately-held Talisma. Oak Investment Partners will control the combined company.

"We believe that there is tremendous opportunity to create a stronger solution provider for the mid-enterprise market," said Oak Investment Partners general partner Frederic Harman in a statement. "Oaks strategic and financial support combined with the Pivotal-Talisma merger creates a compelling CRM choice for the mid-enterprise."

Paul Maritz, former group vice president of Microsofts Platforms Strategy and Developer Group, will also be an investor in the combined company. Both Pivotal and Talisma have developed their technology on Microsofts .Net framework.

Bo Manning, president and CEO of Pivotal, listed a litany of reasons the deal makes sense, including adding Talismas e-service capabilities to Pivotals platform, more than doubling Pivotals R&D and technical support capabilities and adding to the companys field organization and partner network.

"The [Pivotal] Board [of Directors] concluded that this transaction is the best alternative for Pivotal shareholders, customers and employees and recommends that Pivotal shareholders vote to approve the cash offer from Oak," Manning said in a statement.

Manning will continue as president and CEO of Pivotal Corporation, responsible for the new combined entity. Talisma CEO Dan Vetras will be the chief operating officer of the new company, reporting to Manning.

"Pivotal and Talisma are a winning combination," said Vetras in a statement. "We have a strong cultural match, complementary products, architectures and services, and a shared technology and solutions vision."

Pivotal is based in Vancouver, B.C. Talisma is based in Kirkland, Wash. Both companies have extensive development operations in India.