Corporate technology pioneer Plumtree Software on Wednesday said it received an unsolicited buyout offer from the investor group Sutter Opportunity Fund 2, a unit of Sutter Capital Management.
Sutter has offered US$5 per share for the stock, or $2 per share in cash and $3 per share in a promissory note due in five years. Sutter also said it would make a $1 million good faith deposit into an escrow account if Plumtree accepted the offer, which expires on Sept. 10. The offer is subject to approval by Plumtree's board of directors.
San Francisco-based Plumtree said in a statement that it had no contact with Sutter Capital Management prior to receiving the offer, which was came in the form of a letter dated Sept. 3 and addressed to Plumtree CEO John Kunze. The statement also said Plumtree's Board of Directors will evaluate the terms of the offer in due course. Plumtree officials said they could not comment on the offer.
Plumtree went public in June, amid a tough market for software IPOs.
The Sutter Opportunity Fund has launched a series of efforts to recover value from distressed investment properties. The investor group recently bid for some of WorldCom Inc.'s assets and has attempted to buy out failing dot-coms.
Consolidation has been changing the face of the portal landscape for the past several years. With the entrance of large infrastructure companies such as IBM Corp., BEA Systems Inc., Computer Associates International Inc., and Sun Microsystems Inc., many smaller pure-play software players have been squeezed out. Several vendors including Autonomy Corp., Divine Inc., and Ascential Software Corp. have shifted focus away from portal technology, whereas others have gone out of business or been acquired by larger players. Since the portal market formed in the late 1990s, SAP AG bought Top Tier and Citrix Systems Inc. acquired early market player Sequoia Software Corp. More recently, in August knowledge management vendor ServiceWare Technologies Inc. acquired the assets of portal provider InfoImage, which previously filed for bankruptcy.
Rumors have swirled for some time that pure-play portal software players Plumtree and Epicentric Inc. were ripe for acquisition.
According to Hadley Reynolds, director of research at Boston-based Delphi Group, although the portal space is still shaking out, there is still room in the market for software specialists such as Plumtree and Epicentric.
"The portal market is still in its transition period but the game is certainly not over for the specialists. Both Plumtree and Epicentric are still gathering a significant amount of business and placing deals across the Global 2000," Reynolds said.
Platform vendors, notably IBM and BEA, are increasing the pressure on the market, but Plumtree and Epicentric "still have a lead in terms of their knowledge base and domain expertise, and that will continue to sustain their business for some time to come," Reynolds said.
Sutter's bid to buy Plumtree is an aggressive play on fears in the market, attempting to capitalize on investor panic, Reynolds added.
"We don't think the current Plumtree investors will value the franchise at anything like the low level this offer represents," Reynolds said.