Xelus, Kirus Eye Merger

Companies linking service parts planning, reverse logistics/repair center management solutions

Rochester, NY  November 19, 2002  Xelus, a provider of enterprise service management (ESM) solutions, is set to merge with Kirus, a provider of e-business applications for reverse supply chain management.

The deal between the privately held companies is subject to final due diligence, according to a statement from the two software providers.

The combined company is expected to retain the Xelus name, and the Kirus products will become part of the Xelus ESM solution suite for maintenance, repair and aftermarket service of capital equipment.

Xelus said its solutions help companies optimize global service inventory and supply strategies for high-value capital equipment, calculating the right mix of service parts in the right locations to satisfy demand for scheduled and unscheduled maintenance. Xelus competes with such providers as Servigistics and MCA Solutions.

Kirus said its solutions ensure effective use of returned assets by managing returns and exchanges, reverse logistics, warranty tracking, repair center operations and workflow, de-manufacturing, and asset re-disposition.

The two companies believe that the ability to combine Xelus' planning information with Kirus' execution data will customers derive more accurate planning factors, measure actual performance and identify opportunities for process improvement.

"Bringing together planning and execution systems gives customers increased ability to monitor, adapt and respond to a real-time service network," asserted Terry Stinson, chairman and CEO of Xelus.

"It's a good deal for both parties," said Larry Lapide of technology consultancy AMR Research in a November 15 research note. "The companies' products and staffs complement each other well, giving Xelus a much broader and expanded total service parts management footprint."

Both Xelus and Kirus solutions include technology for supplier collaboration and business analytics, and both are built on the J2EE (Java 2 Platform, Enterprise Edition) standard for multi-tier enterprise applications supporting XML, Java Servlets API and portability across the wide range of existing enterprise systems.

Stinson will serve as chairman and CEO of the merged company. Kirus founder Ho Kim will remain with the company and, according to a statement from the companies, "take a significant role in guiding the future product direction." The company will maintain both its development centers, in Rochester, N.Y., and Irvine, Calif.

AMR Research has estimated that the service parts management market has the potential to generate $800 million annually in license and services revenues, and is currently being under-penetrated with annual revenues of around $100 million.

For more information on solutions for the service and support chain, see "In the Field and All Grown Up," the "Net Best Thing" column in the June/July 2002 of iSource Business.