Procuri Acquires Contract Management Solutions

e-Source specialist adds contract management capabilities, secures new round of funding

e-Source specialist adds contract management capabilities, secures new round of funding

Atlanta — March 21, 2005 — e-Sourcing specialist Procuri has acquired Contract Management Solutions, Inc. (CMSI), expanding its offering to include a variety of contract management capabilities.

In addition, Procuri said that it has secured $12.5 million in new equity financing in a Series B up-round led by Procuri's current investor, Insight Venture Partners, and new investor Advent International. A portion of the funds will help continue the company's product expansion and overall business growth throughout the United States, Europe and the Pacific Rim, the solution provider said.

Commenting on the acquisition news, Tim Minahan, senior vice president of supply research and strategy at AberdeenGroup, said: "(The acquisition) accelerates Procuri's plans to expand its sourcing solution footprint with advanced contract authoring, repository and compliance capabilities and doubles the Procuri customer base to more than 300. With little customer overlap, the union presents strong cross-sell opportunities."

CMSI's customer base includes more than 150 companies across various vertical markets, including QUALCOMM and Toyota Motor Sales, two companies that were highlighted in AberdeenGroup's report "Best Practices in Contract Management: Strategies for Optimizing Business Relationships." Both companies were recognized for implementing CMSI's applications to manage the largest number of contracts among all the companies in the Top 10 list.

Procuri said that the combination of its sourcing solutions and CMSI's contract management solutions address the complete end-to-end sourcing process and are available under the Procuri TotalSource suite. Included in this suite is Procuri's current solution, Procuri TotalDecision. Additionally, CMSI's Deal Manager and Contract Manager will be re-branded as Procuri TotalPerformance, while Supplier Manager will be offered as Procuri TotalStrategy. All three solutions are available immediately and can be deployed collectively or individually to meet business needs, Procuri said.

Minahan said that CMSI customers would benefit from the ability to integrate their contracting and compliance processes and systems into their broader sourcing and supplier management initiatives.

"The transaction doubles the size of our customer base and benefits existing Procuri and CMSI customers by creating a single entity that can provide proven, end-to-end solutions that are easily deployable," said Mark F. Morel, Procuri's president and CEO.

Procuri will maintain CMSI's existing operations and employees, with CMSI's president and CEO, Steve Rosbury, serving as a consultant and observer on Procuri's board of directors. Current customers will continue to contact CMSI directly for customer support.

"CMSI's solutions are a natural extension that complements Procuri's sourcing solutions," said Rosbury. "Multiple joint customers have applauded the acquisition as it combines our industry leading contract management solutions with Procuri's functionally rich sourcing solutions to deliver a wider offering and increased savings for all customers."

Together, Insight Venture Partners and Advent International backed the investment based on Procuri's solutions, business model and record of continual revenue and customer growth. Peter J. Boni, an operating partner at Advent International, will join Procuri's board of directors.

"Over the last two years, we have observed Procuri's tremendous growth and the ability to secure and retain global customers and deliver on its strategic vision," said Deven Parekh, managing director at Insight Venture Partners. "We strongly believe in Procuri's business model and, through its continued rapid growth, the opportunity for Procuri to continue its leadership position and expand its reach in this industry."

"With the largest customer base of any standalone sourcing software provider and record-setting growth, it is clear that Procuri's business model is proven in attracting companies of all sizes and effective in maintaining relationships with customers," said Boni. "The synergies of the two companies, Procuri and CMSI, make this a smart investment in a solid company."

Additional Articles of Interest

For more information on the current state of the sourcing market, see the article "The Analyst Corner: Sourcing" in the June/July 2004 issue of Supply & Demand Chain Executive.

For additional information on contract management best practices, see the articles "Five Myths of Contract Management" (July 9, 2003), "Contract Management: Improving Corporate Governance" (July 21, 2003) and "Contract Management for Procurement Best Practices" (August 4, 2003).

For more information on contract management automation, see the article "Digging Out from the Contract Clutter" in the January 2002 issue of iSource Business (now Supply & Demand Chain Executive).