Following years of flat revenue and attempts at realigning its business, Canadian columnar database dinosaur SAND Technology has announced that it is exploring strategic alternatives, including an outright sale. The announcement comes barely six months after SAND sold its SAP Information Lifecycle Management product line to Informatica for $8m.
That divestiture was part of the company’s attempt to refocus its core business on its massively parallel columnar database technology, which it acquired back in 1993 with its Nucleus International acquisition(SAND itself was founded nearly a decade earlier, in 1982). However, SAND has long struggled to grow revenue and has been consistently running deeply in the red. Revenue for the Pink Sheets-listed company has hovered at about $7m for the past five years and it suffered a net loss of $2m in its latest fiscal year.
SAND’s prospects for a sale look dim, however. In the past two years, most of the big database vendors have either acquired or developed their own massively parallel columnar technology. In the off chance that SAND does find an interested buyer, it shouldn’t hope for a high valuation. Most precedent M&A transactions in the data-warehousing space were done for rich multiples, including Teradata’s takeout of Aster Data in March 2011 for an estimated 13.6 times sales, HP’s pickup of Vertica in February 2011 for 11x sales and EMC’s reach for Greenplum in July 2010 for an estimated 14x sales. But SAND’s sale would probably be best compared to Kickfire’s sale to Teradata in August 2010, which we suspect was done for scraps.