Business-to-consumer (B2C) infrastructure company Vignette announced on Monday a $1.38bn takeover of OnDisplay, a firm that sells business-to-business (B2B) enabling software.
Vignette provides customer relationship management software that lets businesses sell to consumers, while OnDisplay provides the means for B2B relationships such as online invoices and purchase orders.
Gregory Peters, Vignette chief executive, explained why Vignette's software and OnDisplay's is such a good fit. "We are combining the leader in system-to-person interaction with the leader in system-to-system interaction in OnDisplay," he said.
The combined entity will create "what will be the first company that will enable C2B2B interaction that will leverage a new paradigm for our customers", he added.
While investors were unimpressed by the all-stock deal, sending Vignette's shares down nearly $9 or 20 per cent to $34.88, one industry analyst saw the synergies. "We believe that this move raises the bar both for OnDisplay and Vignette competitors, as OnDisplay gains significant distribution, customer base and a full suite of applications that none of its competitors have, while Vignette gains a full business-to-business platform well ahead of its competitors," said Marshall Senk, an analyst at researcher Robertson Stephens.
While the deal values OnDisplay's shares at more than $69, investors wary of stock deals between internet companies did not rush in. The price rose by 88 cents to $54.13.
The two companies already have around 20 joint customers - including travel companies Sabre, Travelocity.com and Trip.com - and have had partnership talks for about 18 months.
The combined company will have more than 2000 employees, nearly 900 customers and operations in the US, Europe, Asia, Australia and South America.
Vignette had sales of $89.2m in 1999, while OnDisplay had $11.1m. Both companies make losses.
Double legal trouble for Musk as he also faces civil lawsuit over renewed British pot-holer 'paedo' claims
Battery development could help boost performance of smartphones
Topological photonic chips promise a more robust option for scalable quantum computers
In quantum physics both the chicken and the egg can come first, claim University of Queensland researchers
Cause-and-effect is not always straightforward in quantum physics