Tag: marketing automation

Heading toward an ‘Eloqua-ent’ IPO

Brenon Daly

Contact: Brenon Daly

A little more than a month after the strong IPO by a rival on-demand marketing vendor, Eloqua has taken its first significant step toward an offering of its own, according to market sources. We understand that the company has tapped J.P. Morgan Securities and Deutsche Bank Securities to lead the IPO, with a filing expected in a few weeks. Co-managers will be Pacific Crest Securities, JMP Securities and Needham & Co.

Eloqua has been positioning itself for an offering for the past few years, taking steps such as moving its headquarters from Canada to the Washington DC area, as well as hiring a raft of senior executives, most of whom have experience at public companies. Meanwhile, on the other side, Wall Street appears ready to buy off on marketing automation companies. At least the demand has been there for rival Responsys, which went public in late April and currently trades at a $750m valuation.

Responsys’ valuation works out to about 8 times 2010 sales and 6x 2011 sales at the on-demand company. Eloqua, which also sells its marketing automation software through a subscription model, is thought to be about half the size of Responsys. Assuming that Wall Street values the two rivals at a similar multiple, Eloqua could find itself valued at $350-400m when it hits the market later this year.

Teradata pays a tidy premium for Aprimo

Brenon Daly

Contact: Brenon Daly

Announcing its first major acquisition since it was spun off into a stand-alone company more than three years ago, Teradata said it will pay $525m in cash for Aprimo. The deal marks a significant bet by the data-warehousing giant on the application market. Specifically, Aprimo brings a marketing automation offering to run on top of Teradata’s existing business analytics offering. Aprimo products will continue to be marketed and sold under the company’s name once the transaction closes, which is expected in the first quarter.

According to a conference call discussing the acquisition, Aprimo is expected to generate about $80m in annual sales. (We understand that roughly $60m of that is recurring revenue.) That means Teradata is paying a healthy 6.5 times revenue for Aprimo. That’s slightly ahead of the valuation that IBM paid in its big marketing automation play four months ago. Big Blue handed over $523m in cash for Unica, valuing the publicly traded company at 4.8 times trailing revenue.

Part of Aprimo’s premium could likely be attributed to the fact that it was steadily moving its business from a license model to a subscription basis. In fact, Aprimo’s SaaS offering accounted for a majority of its revenue. IBM’s move was important in the Aprimo process, as we gather that Teradata and Aprimo started talking only after Big Blue had closed its acquisition.

Where might Omniture shop next?

-by Thomas Rasmussen, Kathleen Reidy

When we checked in with Omniture last month, we noted that it was likely to do a bit of shopping. My colleague Kathleen Reidy expanded on that recently with an in-depth report on the possible M&A moves by the analytics giant. Omniture has already shown itself ready to shop, having picked up five companies since its IPO in 2006. Those acquisitions, along with a solid organic growth rate, have helped to push up Omniture’s revenue seven-fold in the past three years. The company finished 2008 with $296m in sales. First-quarter results are due Thursday before the opening bell.

Having essentially consolidated its core market (except for a few private competitors), where might the giant shop next? We think a broader push into marketing automation seems a logical next step. Email marketing is one of the most active areas of Omniture’s Genesis ISV partner program. Potential targets in this space include Eloqua, a well-known and established player in marketing automation. The vendor pulled in an estimated $35m in revenue last year and has so far raised more than $40m in venture funding. Other potential targets include Silverpop, Right On Interactive and Marketbright. Like Mercado Software, which Omniture scooped up last October, all of these email marketing startups are Genesis partners.

Omniture’s acquisitions to date

Target Date Deal value Technology/Rationale
Mercado Software October 14, 2008 $6.5m Retail site search/merchandising
Visual Sciences October 25, 2007 $394m Web analytics market share
Offermatica September 7, 2007 $65m Multivariate testing
Touch Clarity February 14, 2007 $48.5m Behavioral targeting
Instadia January 18, 2007 $11.4m Web analytics market share – Europe

Source: The 451 M&A KnowledgeBase