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Ascential to buy struggling Mercator

Continuing a recent trend toward consolidation in the business intelligence (BI) industry, Ascential Software Corp, Westboro, Mass., announced plans this week to acquire struggling Mercator Software Inc., Wilton, Conn., for $106 million in cash.

The move also betokens an ongoing trend that sees data-centric corporations like Ascential saddling up with integration software providers such as Mercator.

Roy C. King, chairman and CEO at Mercator, told analysts in a phone briefing that the proposed acquisition would “remove the cloud of uncertain corporate viability that has hung over Mercator for the last three years.”

That cloud has been hard to duck. In April, Mercator fended off a proxy contest in which Strategic Software Holdings looked to unseat the Mercator board. And just last December, Mercator reached a settlement that ended a long-standing investigation of Mercator by the Securities and Exchange Commission. The investigation grew out of Mercator’s need to restate financial results in 2000.

Peter Gyenes, Ascential chairman and CEO, was as enthusiastic as King about the planned acquisition.

“It creates what we believe is a powerhouse vendor that is able to spark investment from customers,” he told analysts in the joint phone call with Mercator executives. “Mercator is the leading provider of data transformation and routing solutions that are designed for complex, high-volume transaction processing environments, and as such is highly complementary [to] offerings of Ascential.”

Both CEOs noted that their combined companies will become the “largest independent enterprise data integration software company with current annualized revenues of approximately $250 million and more than 3,000 customers.”

King also noted that once the companies merge they will have “a strong balance sheet and a profitable operating model for 2004.”

About the Author

Rich Seeley is Web Editor for Campus Technology.

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