After Applix, Cognos Is Still Looking

Canadian business-intelligence software company sees this as good time for acquisitions in its space.
Roy HarrisSeptember 6, 2007

Twice before when Cognos made sizable acquisitions, it took its time to digest them. But CFO Tom Manley, discussing yesterday’s $339-million tender offer for Applix Inc., isn’t closing the door on another deal relatively soon.

“There’s no secret that it’s a good time for acquisitions in our space,” he said in a telephone interview with CFO.com. “And we’ll continue to look at acquisition opportunities.”

He noted that two of the larger acquisitions of the past five years for Ottawa, Canada-based Cognos were deals for enterprisise performance planning software company Adaytum three years ago, and for Swedish consolidation and performance management software purveyor Frango two years earlier. “In terms of dollar amounts Applix is the largest, but the other two were around this size,” said Manley, who is also senior vice president, finance and administration, for Cognos.

Part of the company’s goal in agreeing with Westborough, Mass.-based Applix on a $17.87-a-share tender offer was to combine Applix’ 64-bit, in-memory analytics capability — through the Applix TM1 multidimensional online analytical processing server — with Cognos’s software offerings geared to financial performance management.

Cognos and other business-software providers continue to find the acquisition market attractive, Manley said, if they have strong cash positions, and don’t need to hit up banks for financing. “We’re using cash from our balance sheet,” Manley said, noting that the pull-back in other M&A areas reflects the credit crisis and its impact on acquirers who must borrow to do their deals.

Some of the biggest software acquisitions this year have involved the giants of enterprise resource planning, Germany’s SAP and Oracle Corp. of Redwood Shores, Calif. And performance management software companies have sometimes been in their sights.

“It’s hard to relate what we’re doing to what those two guys are doing,” said Manley. “They’re in a completely different battle. We’re focused on the breadth of the performance management solutions that we’re developing for our customers.

He added, “There is a lot of consolidation going on, but we want to be the independent supplier of performance management solutions.”