Pivotal has finally plumped for a buyer in the shape of chinadotcom corporation, after Oak Investment Partners declined to match the Hong Kong-based company’s bid.
The move follows Onyx Software’s decision last week to withdraw from its hostile takeover attempt because of the “low probability” of success, but will require Pivotal to pay a $1.5 million break fee to Talisma, which is owned by Oak and with which it would have been merged had the deal gone through.
The plan is to hold an extraordinary meeting of Pivotal’s shareholders to consider and approve the plan of arrangement in early January, with the aim of closing the transaction by February. They will be given two purchase options: they can either have $1 in cash and $1.14 of common shares in chinadotcom, or $2 in cash.
Eric Rosenfeld, chairman of Pivotal’s special committee, said: “Although it may not have always been apparent to outsiders, every step that the special committee has taken throughout this process has been with the intention to maximise shareholder value for Pivotal.”
If the acquisition is approved, Pivotal will be merged with CDC Software, a wholly owned subsidiary of chinadotcom, but will operate as a separate business unit, with its own strategy, brand, applications and management team.
The aim will be to increase the number of technical support staff by 40 per cent, grow research and development headcount, boost marketing spend by 200 per cent and restart its acquisition policy.
But Pivotal also intends to try and sell its CRM packages into CDC’s installed base of 1,600 customers, boost its presence in Asia by taking advantage of CDC’s distribution network in the region and add to its use of existing offshore development facilities in India by taking advantage of chinadotcom’s in India and China.
CDC as a whole is also intent on growing by acquisition. After purchasing IMI and Executive Suite, it is also in the process of purchasing Ross Systems.