March 2005

Ecometry’s holding company has ordered the Blue Martini

The e-commerce company which recently extended the lifespan of its HP 3000 support is extending its reach with a $54 million offer for Blue Martini Software. Multi-Channel Holdings, the holding company set up to finance the recent buyout of Ecometry’s founders, made an offer of $4 a share to shareholders of Blue Martini, which makes sales optimization systems used by 170 companies including Harley-Davidson, Panasonic and Mitsubishi.

John Marrah, the Ecometry CEO who says he helped set up Multi-Channel as part of the deal to attract investment from $2.6 billion private equity firm Golden Gate Capital, said the new merger is destined to bring more point of sales prowess to Ecometry sites already selling in multiple channels. “Their customers are our targets, and our customers are their targets,” Marrah said. “But we both bring product to the other that will strengthen our positions — not only in our existing customers but in getting new business.”

Blue Martini has not struggled to generate revenue, but the public company hasn’t posted a profit since its inception. Its software guides a company’s staff, partners and customers through sales interactions, helping them to sell more. Ecometry’s holding company will pay a generous premium to get Blue Martini, 63 percent higher than Blue Martini’s stock price at the time of the offer. But the $54 million is only a little more than halfway to Golden Gate’s $100 million threshold for investments. Marrah said he expects the deal to close by May.

The merger will keep Blue Martini intact in its San Mateo, Calif. headquarters. Marrah added that by combining Ecometry and Blue Martini functionality, customers wouldn’t be able to find a broader choice of capabilities for multichannel retailing. Blue Martini has a strong presence in distribution manufacturing, which Marrah said has been a future area of development for Ecometry. Blue Martini lets Ecometry buy what it was prepared to build. “There is not another single company that will be able to compete in breadth of functionality for a multi-channel retailer,” Marrah said. Blue Martini touts “clienteling,” a segment that allows retail associates to manage customer relationships (CRM) from point of sale terminals (POS). The merger of CRM and POS takes Ecometry even further into multiple channels, but the new functionality is unlikely to make it into HP 3000 versions of Ecometry.

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