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 will 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.
Organizations are struggling to meet the demands of rapidly shifting
customer buying patterns in the era of mobile and social networks. This
new digital marketplace requires companies to be highly responsive to
consumer demands on the fly. Whether it’s setting and executing the
right pricing strategy or the ability to automatically adjust pricing
based on online and offline data, being able to rapidly shift to market
changes has become a key competitive advantage for global businesses.
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.
By gaining a quick and accurate analysis of consumer trends, for
example, a retailer can predict how consumers will respond to a price
change before making that critical decision. A brand manager can adjust
the marketing mix for a product to better drive sales in the grocery
channel. A merchant and supplier can work together to understand how one
shopper segment differs from another to craft the best merchandising
plan. By understanding shoppers across channels, companies can adapt
more quickly to rising customer demands.
“IBM Smarter Commerce is redefining how brands buy, market, sell and
service their customers in ways that their customers want,” said 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,” said 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.”
IBM is a recognized market leader in each of the categories within
Smarter Commerce[1], which was launched in March 2011. DemandTec will
extend this leadership by enabling companies to use cloud computing
services to gain insights about customer merchandising and pricing
preferences to better market, sell and deliver the right product at the
right place, and at the right price. DemandTec also expands IBM’s
Software-as-a Service (SaaS) strategy by adding additional,
subscription-based offerings to IBM’s SaaS solutions portfolio.
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, which is a key driver of growth
and profitability for IBM.
DemandTec is based in San Mateo, Calif. and has more than 350 employees,
with additional offices in Minneapolis, London, Paris, and Bangalore.
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.
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. 