Chinadotcom Corp [CHINA] has become the third bidder attempting to take control of Pivotal Corp [PVT.TO] as it pursues its ambition to turn its CDC Software subsidiary into a major force in ERP applications with sales of $240 million in 2004.
It has made an offer worth up to $56 million for Pivotal, which is currently the subject of a takeover battle between private equity firm Oak Investment Partners and rival CRM vendor Onyx Software Corp [ONXS].
Chinadotcom has topped the two earlier bids by offering either $2 a share in cash or $2.14 a share with a mixture of $1 in cash and $1.14 in shares.
Oak offered $1.78 in a cash bid accepted by the Pivotal board, while Onyx made an all-share bid currently worth $2.08.
To tempt the Pivotal board further, CDC Software has offered to provide $20 million in bridge financing prior to completion of the acquisition.
Hong Kong-based Chinadotcom has been attempting to turn CDC into a major software force with the purchase of a controlling stake in supply chain management company Industri-Matematik International Corp, and the $70 million acquisition of ERP vendor Ross Systems Inc [ROSS] that is due to close early next year.
While CDC already has ERP, SCM, human resources and payroll products, it only has limited CRM functionality, and because Pivotal is already a business partner, it is a logical target for an acquisition.
A combination of the two companies would enable Pivotal to accelerate its expansion, particularly in the high-growth markets for CRM in Asia, through cross-selling on the back of CDC’s software platform.
With the inclusion of Ross, Chinadotcom could achieve revenue of $185 million in 2004 and the acquisition of Pivotal could lift this figure to $240 million.
In the third quarter to September 30, Chinadotcom reported net income of $6 million on revenue that doubled to $24.4 million. With cash and equivalents of $363 million, it is in a position to make further acquisitions.
This article was based on material originally published by ComputerWire.
