Siebel Systems Monday announced a deal to scoop up rival Janna Systems Inc. in an acquisition that Siebel executives hope will give the San Mateo, Calif.-based vendor a leg up in selling customer relationship management (CRM) software to financial services companies and insurers.
With the ink barely dry on four previous acquisitions that it has made since January, Siebel said it would extend the buying spree by purchasing Toronto-based Janna in a stock swap valued at $US975 million based on yesterday's closing price for Siebel's shares. The acquisition of Janna - which had sales of $US13 million last year and $US12.6 million during the first half of this year - is expected to be completed in the fourth quarter.
Through the deal, Siebel would expand its line of CRM applications by adding Janna's Enterprise Suite 2001 software, which lets financial institutions and insurance companies synchronize their transactions with customers in various channels, including Web storefronts, call centers and resellers. Janna's users include companies such as Merrill Lynch & Co., Lehman Brothers Holdings Inc., First Union Securities and The Allstate Corp.
As part of the announcement, Siebel said it plans to combine the Janna software and its own applications for financial services users into a single Web-based product suite that's due for release next summer. Siebel's users in the financial services industry include Bank of America Corp., Charles Schwab & Co. and The Chase Manhattan Corp.
In a report on the deal Tuesday, Boston-based consulting firm AMR Research Inc. said the buyout of Janna neutralizes a tough competitor and "it looks to be a well-spent billion dollars" for Siebel. Financial services "is a market Siebel has slowly been trying to crack, but too often [it] loses deals to Janna," the AMR report said.
But integrating the two lines of software won't be easy because of overlaps between them, AMR added. "It will be tricky deciding which pieces will be used to form the new [unified] product," the report said.
Steve Bonadio, an analyst at Meta Group Inc. in Stamford, Conn., agreed that it will likely "take a serious amount of time to integrate the [Janna] applications into the Siebel fold." But he said the acquisition should give Siebel users "some rich functionality" that the CRM market leader's software doesn't currently support. Siebel's financial services applications aren't as industry-specific as Janna's product line, Bonadio added.