Procurement software house Ariba has agreed to buy Dutch supply chain management firm Quadrem for $150m (£93m) in cash and stock.
The deal gives Ariba a key vertical market for its software and supply networks, since Quadrem has a dominant presence in certain key corporate industries such as mining, utilities and the public sector, and is well established in Africa and Latin America which is virgin territory for Ariba.
"I do believe the merger is good news for both sets of customers and suppliers. Firstly, Ariba reinforces its place as one of the four or five large supplier networks that will eventually dominate the market," said Duncan Jones, principal analyst at Forrester Research.
"Secondly, Quadrem customers will, in time, be able to upgrade to a superior platform - Quadrem is currently based on an old version of SAP's SRM module - without having to worry about switching their suppliers to a different service. "
Jones suggested that, while some enterprise Quadrem customers are likely to see prices rise as a result of the takeover, they will benefit from access to a wider range of suppliers.
Ariba and Quadrem were early players in the e-procurement market, but Jones warned that there will be further consolidation until four or five companies dominate the sector.
"In uniting our know-how, solutions and people, Quadrem and Ariba can deliver unparalleled network scale and reach that enables buyers and sellers around the world to improve supply chain performance and tap new business opportunities," said Charles Jackson, chief executive of Quadrem.
"Through the combined entities, companies will have access to a truly global partner who can help them optimise and extend buyer and supplier commerce, and ultimately the results that they deliver."
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