IBM/DemandTec Deal to Challenge Organizational Boundaries
IBM and DemandTec have entered into a definitive merger agreement for IBM to acquire DemandTec in an all cash transaction at a price of $13.20/share, or at a net price of approximately $440 million, after adjusting for cash.??
The acquisition of DemandTec is expected to extend IBM’s Smarter Commerce initiative by adding cloud-based price, promotion and other merchandising and marketing analytics to help companies better define the best price points and product mix based on customer buying trends.
At the same time, the deal is in line with a trend — across many industries — where the lines between merchandising, marketing, commerce and supply chain are blurring. IBM expects to be able to leverage it’s many assets to provide customers with solutions for multiple processes not typically purchased or implemented together.
IBM estimates the market opportunity for Smarter Commerce at $20 billion in software alone. Extending these capabilities to the cloud gives organizations immediate access to consumer information, providing instant return on investment.
DemandTec delivers cloud-based analytics software that enables businesses to examine different customer buying scenarios, both online and in-store. As a result, companies can spot trends and shopper insights to make better price, promotion, and assortment decisions that increase revenue and profitability.
“IBM Smarter Commerce is redefining how brands buy, market, sell and service their customers in ways that their customers want,” says Craig Hayman, general manager of Industry Solutions at IBM. “Bringing science to the art of pricing and promotion is a big part of this strategy, and the combination of DemandTec and IBM will help marketing and sales executives in retail and other industries drive more revenue and increase profitability.”
“DemandTec has unprecedented capability to improve customers’ price and promotion tactics on a stand-alone basis and connect retailers and manufacturers for collaborative planning through the cloud,” says Dan Fishback, president and chief executive officer of DemandTec. “IBM Smarter Commerce is the perfect fit for DemandTec. IBM is the only provider of price and promotion offerings within a rich solution set that supports companies’ buy, market, sell and service processes.”
DemandTec has approximately 450 customers worldwide in retail, consumer products and other industries. Retail industry segments served include grocery, drug, convenience, consumer electronics, office supplies, apparel, department stores, and quick-serve restaurants. Manufacturer segments include fast moving consumer goods categories such as food, beverage, and health & beauty. DemandTec also has a portfolio of 31 patents in the areas of pricing, response analysis, and promotion analysis.
Consistent with IBM's Smarter Commerce strategy, IBM will continue to support and enhance DemandTec’s technologies and clients while allowing them to take advantage of the broader IBM portfolio. DemandTec will be integrated into IBM's Software Group.
The acquisition is subject to DemandTec shareholder approval, applicable regulatory clearances and other customary closing conditions. It’s expected to close in the first quarter of 2012.
The acquisition of DemandTec is expected to extend IBM’s Smarter Commerce initiative by adding cloud-based price, promotion and other merchandising and marketing analytics to help companies better define the best price points and product mix based on customer buying trends.
At the same time, the deal is in line with a trend — across many industries — where the lines between merchandising, marketing, commerce and supply chain are blurring. IBM expects to be able to leverage it’s many assets to provide customers with solutions for multiple processes not typically purchased or implemented together.
IBM estimates the market opportunity for Smarter Commerce at $20 billion in software alone. Extending these capabilities to the cloud gives organizations immediate access to consumer information, providing instant return on investment.
DemandTec delivers cloud-based analytics software that enables businesses to examine different customer buying scenarios, both online and in-store. As a result, companies can spot trends and shopper insights to make better price, promotion, and assortment decisions that increase revenue and profitability.
“IBM Smarter Commerce is redefining how brands buy, market, sell and service their customers in ways that their customers want,” says Craig Hayman, general manager of Industry Solutions at IBM. “Bringing science to the art of pricing and promotion is a big part of this strategy, and the combination of DemandTec and IBM will help marketing and sales executives in retail and other industries drive more revenue and increase profitability.”
“DemandTec has unprecedented capability to improve customers’ price and promotion tactics on a stand-alone basis and connect retailers and manufacturers for collaborative planning through the cloud,” says Dan Fishback, president and chief executive officer of DemandTec. “IBM Smarter Commerce is the perfect fit for DemandTec. IBM is the only provider of price and promotion offerings within a rich solution set that supports companies’ buy, market, sell and service processes.”
DemandTec has approximately 450 customers worldwide in retail, consumer products and other industries. Retail industry segments served include grocery, drug, convenience, consumer electronics, office supplies, apparel, department stores, and quick-serve restaurants. Manufacturer segments include fast moving consumer goods categories such as food, beverage, and health & beauty. DemandTec also has a portfolio of 31 patents in the areas of pricing, response analysis, and promotion analysis.
Consistent with IBM's Smarter Commerce strategy, IBM will continue to support and enhance DemandTec’s technologies and clients while allowing them to take advantage of the broader IBM portfolio. DemandTec will be integrated into IBM's Software Group.
The acquisition is subject to DemandTec shareholder approval, applicable regulatory clearances and other customary closing conditions. It’s expected to close in the first quarter of 2012.