Rumors have surfaced of another big consolidation play in the business intelligence market, this time with Hyperion Solutions reportedly angling to make a swoop for privately held Information Builders.
The rumors, which first surfaced late last year, have intensified in recent weeks, forcing some financial analysts to issue advisories to investors. One financial analyst said Information Builders would be an uncharacteristically large purchase for Hyperion.
Earlier this year Computer Business Review had heard from background sources that both companies had been engaged in serious talks over a possible merger. That source was surprised that the rumor did not break earlier given all the Hyperion disclosures that have been made, and which could easily be pulled from public sources like Yahoo! Finance.
Hyperion evidently disclosed to some financial analysts that it was having talks with New York-based Information Builders and was sharing sensitive information. But the same source now says that the deal has either been stalled or may be off altogether.
Nevertheless, Santa Clara, California-based Hyperion is financially strong enough to make an acquisition. The company is sitting on a cash chest in excess of $400 million.
Hyperion is also coming under increasing pressure from other business intelligence (BI) pure-plays like Cognos and Business Objects, as well as database players like Microsoft and Oracle, which are starting to move into the BI space. Buying Information Builders could also help Hyperion to increase its size more quickly, without forcing the company to wait for customers to migrate to its new System 9 release.
Information Builders could also give Hyperion an immediate foothold in the lucrative enterprise reporting space. Despite acquiring query and reporting technology from its Brio Technology acquisition in 2003, Hyperion has tended to focus on financial analytic applications. Information Builders’ strengths in large-scale web reporting could help the company to compete against leading products in the market like Business Objects’ Crystal line and Cognos’ new ReportNet offering.
The financial health of Information Builders is hard to gauge. The company has consistently quoted revenue of $300 million in its corporate boilerplate for the past several years but has made no comment about its growth or its profitability.
This isn’t the only acquisition rumor that has been doing the rounds in the BI space recently. For over a year now IBM has been rumored to have Cognos in its sights. And a couple of years ago Business Objects emerged as one of the companies on Oracle’s hit list that emerged during its protracted struggle to buy PeopleSoft. Business Objects’ recent poor financial performance has again put the company in the acquisition spotlight, with Oracle and SAP being touted as possible suitors.
Both Hyperion and Information Builders have declined to comment on the merger speculation. However, if a Hyperion-Information Builders merger does materialize, it could be the biggest M&A activity in the market since Business Objects made its $1.2 billion swoop for Crystal Decisions in 2003. That move sparked off a wave of frenzied consolidation activity in the market.