Cloud-based, end-to-end supply chain business network provider E2open has announced this evening the acquisition of cloud-based manufacturing and product management provider SERUS Corporation. According to the announcement, the transaction is valued at approximately $18.5 million at closing (comprised of approximately $14.5 million in cash and $4.0 million in E2open common stock), with up to an additional $7.5 million in cash contingent upon the achievement of certain revenue-related financial performance milestones.
SERUS’s capabilities as a one to many cloud-based network provider include the ability to integrate product management and new product introduction information management needs up and down a primarily outsourced supply chain. Supply Chain Matters featured our profile of SERUS in March of this year and we were impressed with the capabilities of their platform in supporting product management information integration up and down an outsourced supply network.
This announced acquisition is the second for E2open, after becoming a public company. The former was the stunning acquisition of supply chain collaborative and scenario planning technology provider of icon-scm for $34 million in total consideration in July 2013.
SERUS’s roots include initial adoption by a number of semiconductor focused manufacturers with complex supply chain business and information flows. This provider has of late expanded beyond semiconductor to high tech, consumer electronics and contract manufacturing supply network environments. Named lighthouse customers include AMD, Flextronics,Juniper, Micron, Nvidia, Sun Microsystems division of Oracle, Qualcomm/Atheros, among others. Industry supply chains such as aerospace, automotive, industrial equipment and telecommunications have further been targets for SERUS. Each deal with complex bill of material environments, have adopted more dependency on digital software and electronics content in respective products and have more dependency on outsourced suppliers and trading and design partners.
As noted in the press release announcement from E2open, from this author’s perspective, the combination of SERUS and E2open has the potential to provide the broadest set of capabilities for business networks in the market today. Ironically, this author delivered a SERUS sponsored webinar last week. During that webinar we conducted an interactive poll of participants that indicated that participants are predominately dealing with challenges in reducing NPI cycle time and improving supplier and product management collaboration. One of my key takeaways for our audience was that leveraging and end-to-end supply-demand network to address needs for bidirectional product management information and deeper collaboration with contract manufacturers, suppliers and design partners is the new opportunity for industry supply chains to effectively compete on responsiveness, quality, and speed to market.
With the combination of E2open and SERUS, the market will have the opportunity to evaluate a business network provider that incorporates a far broader collection of collaborative planning, scenario management synchronized execution, and now product design and management bidirectional integration capabilities.
Supply Chain Matters will provide a more in-depth commentary concerning what this acquisition will offer for industry supply chains at a later date, after the official closing. Suffice to note at this point that cloud-based end-to-end supply chain capabilities that combine planning and synchronized customer fulfillment, and now PLM and product management, have become very attractive for the market, and will continue to motivate these types of announcements.
Disclosure: E2open is a Sustaining Sponsor of the Supply Chain Matters blog.