Activity in the business analytics market picked up a notch Wednesday with the announcement that Applix, Inc. will be acquired by Ottawa-based Cognos, Inc. for roughly $339 million.
Applix is a publicly held company based in Westborough, Mass. with more than 3,000 customers, supplies business analytics solutions in a wide range of fields including the healthcare sector.
The company is expected to complement Cognos' flagship products - Cognos 8 Planning, Cognos 8 Controller and Cognos 8 Business Intelligence - and boost Cognos' capabilities to help companies manage their financial performance.
"Applix will broaden our solution offering and provide Cognos with an innovative, 64-bit, in-memory analytics capability," said Rob Ashe, chief executive of Cognos. "It will also bring into the company a very strong employee and customer base that has been committed to performance management through high-impact analytics."
Cognos had reported a strong first quarter, with $22.4 million in profits based on $236.7 million in revenue, positioning it in a crowded field that includes Business Objects, Oracle and SAS. The Cognos deal is just the latest in a string of announcements related to the field, highlighted by Business Objects' acquisitions of Inxight Software and Cartesis and its release of Crystal Decisions this year and Oracle's $33 billion purchase of Hyperion in April.
"They're all trying to round out their business analytics platforms," said David Corbett, a project manager at Applix, in an interview two months ago. "As the healthcare field becomes more competitive, business analytics becomes more and more important."
Corbett says healthcare providers are interested in business intelligence (BI) solutions because they provide the ability to plan ahead, to anticipate healthcare costs and needs based on data compiled from previous events. And as business intelligence solutions become more advanced, they're being combined with performance management solutions.
Cognos, which serves more than 23,000 customers in more than 135 countries, has made a cash tender offer of $17.87 per share, which equates to approximately $339 million, or $306 million net of Applix cash on hand, according to a press release. The offer is 24 percent higher that Applix' share price at the close of the day on Sept. 4. The deal is expected to be completed by the end of 2007.
"We believe that this combination represents a great opportunity for the entire Applix community," said David Mahoney, president and CEO of Applix, which reported trailing 12 months revenue of $61.2 million and year-over-year growth of 45 percent. "Our organizations are very complementary, and I feel that they will blend together to create a leader in the financial performance management market."