Calico Commerce, Inc. to purchase ConnectInc.com for 12.37 times revenue
Weekly Corporate Growth Report, Nov 29, 1999
The Deal: Calico Commerce, Inc. has announced that it will be acquiring ConnectInc.com for $83 million in stock, including the assumption of $2.4 million in debt. According to the terms of the acquisition Calico will issue 0.081 share for each ConnectInc. share. This deal values ConnectInc. at $5.43, a 27.7% premium over ConnectInc.'s closing price the day prior to the announcement.
Discussion: ConnectInc. has shifted from business-oriented Web application software to focus on systems integration. It now offers business Web site building, implementation and support services. ConnectInc. also offers a new version of its MarketStream software, which helps companies conduct business via the Internet and corporate intranets. ConnectInc.com products also incorporate software options from IBM, Fulcrum Technologies, and RSA Data Security.
High-tech manufacturers, telecom service providers, retailers, and financial service companies use Calico's eSales software with their Web sites to help customers make online purchases of typically complex products. Based on customer input, the software assesses product requirements and purchasing constraints, then customizes information and quotes on a variety of products and services. Major customers include Dell and Gateway.
The company sells through a direct sales force and partnerships with IBM and Silknet Software. Services account for 50% of Calico's sales.
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