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Spend Management Consolidation as Ariba Announces Deal to Acquire Procuri
$93 million acquisition strengthens Ariba's hand in the on-demand space, expands opportunities in mid-market
Sunnyvale, CA — September 20, 2007 — The big are getting bigger again in the spend management space, as major player Ariba announced a definitive agreement to acquire other major player Procuri in a $93 million cash and stock deal set to close in the next quarter.
Publicly held Ariba, already a major player — some would say the major player — in the spend management arena, looks to pick up significant capabilities in, and a large and growing customer base for, on-demand supply management in acquiring privately held Procuri, which has a mature on-demand offering encompassing strategic sourcing, contract management, spend analysis and supplier management operations.
Atlanta-based Procuri also has built a customer base of more than 300 companies, including big names such as ConAgra Foods, Domino's Pizza and Sun Microsystems, as well as mid-market players such as Conn-Selmer, LeChase Construction Services and Stonyfield Farm. Currently midsize enterprises reportedly comprise about 60 percent of Procuri's customer base.
Ariba cited Procuri's strength in delivering on-demand solutions as a primary driver behind the acquisition. Ariba has its own on-demand solution, and no decision has been made yet on how that segment of its offering will evolve moving forward, according to Christine Crandell, vice president of marketing at Ariba. But Procuri has had extensive experience both selling and delivering on-demand solutions to a broad customer base, particularly the mid-market, a segment that Ariba has struggled over the last two years to crack.
"Why we're so excited about this marriage is that Procuri is a pure-play on-demand vendor," Crandell said. "They have had a tremendous amount of success in bringing to market and gaining a significant amount of customers with their on-demand solution. What we also see as being very unique and of high value is that Procuri has figured out how to crack the nut of selling not only to enterprise-level companies, but also to companies that are in the mid-market."
Breaking down the Spend Management "Caste System"
Tim Minahan, senior vice president of marketing at Procuri and a long-time industry watcher, seconded that view, suggesting that the deal would help "break down the caste system" that has restricted some portion of the benefits of spend management solutions to large enterprises that could afford significant investments in behind-the-firewall applications.
"Both companies felt that the market is moving to support the transition to software-as-a-service, or on-demand, and the ability to bring together these companies, who are clearly leaders in the area of delivering solutions in that mode, allows us to open up the spend management market to a broader range of companies," Minahan said.
Publicly held Ariba, already a major player — some would say the major player — in the spend management arena, looks to pick up significant capabilities in, and a large and growing customer base for, on-demand supply management in acquiring privately held Procuri, which has a mature on-demand offering encompassing strategic sourcing, contract management, spend analysis and supplier management operations.
Atlanta-based Procuri also has built a customer base of more than 300 companies, including big names such as ConAgra Foods, Domino's Pizza and Sun Microsystems, as well as mid-market players such as Conn-Selmer, LeChase Construction Services and Stonyfield Farm. Currently midsize enterprises reportedly comprise about 60 percent of Procuri's customer base.
Ariba cited Procuri's strength in delivering on-demand solutions as a primary driver behind the acquisition. Ariba has its own on-demand solution, and no decision has been made yet on how that segment of its offering will evolve moving forward, according to Christine Crandell, vice president of marketing at Ariba. But Procuri has had extensive experience both selling and delivering on-demand solutions to a broad customer base, particularly the mid-market, a segment that Ariba has struggled over the last two years to crack.
"Why we're so excited about this marriage is that Procuri is a pure-play on-demand vendor," Crandell said. "They have had a tremendous amount of success in bringing to market and gaining a significant amount of customers with their on-demand solution. What we also see as being very unique and of high value is that Procuri has figured out how to crack the nut of selling not only to enterprise-level companies, but also to companies that are in the mid-market."
Breaking down the Spend Management "Caste System"
Tim Minahan, senior vice president of marketing at Procuri and a long-time industry watcher, seconded that view, suggesting that the deal would help "break down the caste system" that has restricted some portion of the benefits of spend management solutions to large enterprises that could afford significant investments in behind-the-firewall applications.
"Both companies felt that the market is moving to support the transition to software-as-a-service, or on-demand, and the ability to bring together these companies, who are clearly leaders in the area of delivering solutions in that mode, allows us to open up the spend management market to a broader range of companies," Minahan said.
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