Extricity will contribute its B2B relationship management software as Peregrine takes to market a digital business offering that includes software products and managed Internet services using Peregrine's Get2Connect trading network.
The two companies will combine Peregrine's focus on electronic commerce transactions over a multitude of data formats including XML, RosettaNet and Electronic Data Interchange and its online catalog offering with Extricity's business process and application integration software.
The goal is to enable businesses to use the Internet to seamlessly communicate with buyers, suppliers, business partners and electronic markets, regardless of data formats, communication protocols and business processes. Peregrine asserts that this combined offering will help companies move from batch-oriented document exchange to real-time, process-based collaboration.
"This shift from simple electronic document exchanges to true collaborative commerce represents the next generation in B2B," said Steve Gardner, chairman and CEO of Peregrine. "Our customers will be able to reduce the frictional costs associated with managing the flow of information, infrastructure assets and business relationships, both within and between companies, helping them move to the next level of digital business."
For the last decade, companies have been largely focused on streamlining internal systems such as sales, accounting, finance, manufacturing, inventory and supply chain management. Today's challenge lies in creating links between these islands of automation, both within and outside the firewall, to build fully integrated trading communities with the capacity to boost productivity and create economic value.
"Companies have typically found that return on B2B investments has gone largely unrealized with the inability to onramp suppliers, create dialogues among them and ensure a return on investment," said Louis Blatt, senior vice president and general manager of Peregrine's E-Markets Group, who will lead the combined global business unit following the conclusion of integration activities. "That will change as we move buyers and suppliers beyond simple connectivity and discrete document transformation to a continuous electronic dialogue. With Extricity, we are assembling the platform required to link our customers' internal business applications, then leverage that connection beyond the firewall to build more productive business relationships for customers, suppliers and employees."
Peregrine will integrate key product offerings within the next 90 days and begin rolling them out to existing Peregrine customers, Extricity customers and the general public. Initially, Peregrine will incorporate Extricity's B2B process management capabilities into its Get2Connect.net e-Business platform. In addition, the two companies will leverage Extricity's strong presence in RosettaNet to create a comprehensive service-oriented solution for this target audience that includes end-to-end connectivity, integration and business community rollout. Finally, within the three-month timeframe, the two companies plan to fully integrate Extricity's process-based collaboration tools into Peregrine's e-Business enablement, data transformation and business partner rollout offerings.
Barry Ariko, Extricity's chairman and CEO, will become a member of Peregrine's board of directors.
Under the terms of the acquisition, Peregrine will issue approximately 9.2 million shares of common stock for all of Extricity's outstanding stock in a stock-for-stock tax-free reorganization. The transaction has been approved by the Board of Directors of both companies and is subject to regulatory approvals and customary closing conditions. Based on the March 12 closing stock price of $18.3125, the transaction value is approximately $168 million. It is expected to close late in the March quarter or shortly thereafter. The transaction will be accounted for using the purchase method of accounting, and the transaction is anticipated to be EPS neutral next fiscal year and accretive to subsequent periods.