Supply and contract management technology provider Emptoris today announced that it has completed the acquisition of telecom expense management provider Rivermine Inc.. As with previous Emptoris acquisitions, financial details are sketchy, and we choose not to speculate on either the cost of revenue multiple involved. Both companies have private ownership. However, in the view of Supply Chain Matters, this acquisition appears on the surface to be a move that will benefit both Emptoris and its existing customers.
Fairfax Virginia based Rivermine provides technology that helps firms to gain visibility into, and control over, their telecommunications spending, including ordering, inventory, invoice processing and auditing.. The company claims coverage of over $6 billion in telecommunication spending and a healthy revenue growth rate. Rivermine has also had its share of previous acquisition activity, acquiring two separate companies a mere year ago, including MBG Expense Management.
Procurement teams, especially those residing in Fortune 1000 companies, view the control of telecommunications expense as one of their top challenges, with typical corporate-wide expenses in the millions of dollars. This area, however, typically falls under the management umbrella of IT. With the current explosion of mobile-based and other advanced communications, these same companies increasingly have difficulties in understanding the various components of spending and utilization over communications spending. Traditional ERP procurement software suites lack the deep functionality to manage this particular area. Rivermine provides its customers an on-demand software-as-a-service platform to manage and control this activity, and the savings can be substantial.
This acquisition fills another strategic hole for Emptoris in its ability to provide customers broader tactical management tools surrounding key services procurement. The acquisition also serves as further evidence that Emptoris primary investor, Marlin Equity Partners, continues to follow through on a growth strategy that includes bankrolling strategic acquisitions for the company. In 2009, Emptoris acquired the labor services and contract management of Click Commerce which has since been rebranded as Emptoris Services Procurement. The acquisition of Rivermine adds telecommunications spend analysis and capabilities to the services procurement support area. Industry vertical penetration also appears to be complimentary with both companies targeting similar industry verticals. Emptoris management indicated an existing customer overlap of between 5-10 customers, which provides lots of opportunity for upselling. Major system integration partnerships are also similar, featuring both IBM and Accenture, which provide certain telecom business process outsourcing and control services.
In our acquisition briefing, I was informed by Emptoris management that initially Rivermine will remain independent as a wholly-owned subsidiary, and will retain its existent management team. This is a smart move on the part of Emptoris management, since telecom expense management brings specific expertise, and as previously noted, may involve target audiences beyond procurement.
With this acquisition, Emptoris will now include over 300 installed based customers with 650 global based employees, and a significant profile in the best-of-breed procurement technology arena. Emptoris customers should view this acquisition as a positive in that over time a broader suite of functionality addressing telecom management will be available for consideration.
Bob Ferrari
