‘Progress-ing’ in a restructuring

Contact: Ben Kolada

Continuing its yearlong restructuring, Progress Software is selling its Apama complex event processing (CEP) assets to Software AG, effectively unwinding its 2005 acquisition of the startup. Although asset sales have become particularly popular and Progress has certainly been on a corporate diet lately, this move wasn’t widely expected in part because Progress had seemed to indicate that Apama was part of its core business.

In April 2012, Progress announced a restructuring plan that, among other moves, would refocus on its core OpenEdge, DataDirect and Apama products. However, the company has since had a change of heart regarding Apama. In announcing the divestiture, Progress said Apama’s target market of Wall Street and big telcos, as well as its deployment and sales model, differ significantly from Progress’ application development platform, which targets the midmarket. (We note that Progress is retaining Apama’s core decision analytics capability.)

The deal follows Progress’ sale of 10 product lines during the two previous quarters. Terms weren’t disclosed. (For the record, Progress paid $25m for Apama in April 2005.) According to our understanding, Software AG is paying less for Apama – both on an absolute and relative basis – than TIBCO paid in a directly comparable CEP deal earlier this week, when it reached for StreamBase Systems. We’ll have a longer report on this acquisition in an upcoming Daily 451.

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Emerald Isle M&A

Given that today is Bloomsday, we’ve given ourselves literary license to take a look at deal flow between the US and Ireland. (Don’t worry, if you’re like us and have never actually managed to get through James Joyce’s ‘Ulysses’ – despite taking more than a few cracks at the tome – this Insight will still make sense. Quick show of hands: Who’s actually read all the way to “…and yes I said yes I will Yes”?)

In any case, deal-flow between the two countries has been remarkably stable during the past four years, clipping along at about 30 deals each year. M&A spending in the most-recent year, however, has fallen to its lowest level, just half the previous year and one-quarter the level in the year before that. (Note: In three weeks, we’ll publish our annual Trans-Atlantic Tech M&A Banking Review. Obviously, the steady decline of the US dollar has had a big influence in deal-making. So far, we’ve seen European acquirers be even more active than the previous year, while US buyers have only spent about half as much as the same period last year. You can request a copy of last year’s report here.)

One company that may very well figure into the US-Ireland M&A tally very shortly is Iona Technologies. We noted in February that the Dublin-based company had attracted an unsolicited bid from an unknown company, which turned out to be Germany’s Software AG. Iona has retained Lehman Brothers, which led its IPO in the late-1990s, to advise it. At the time, we tapped SAP and Sun Microsystems as the most-logical buyers of Iona. More recently, an Irish newspaper reported that Progress Software or Red Hat is Iona’s ‘preferred’ buyer. Meantime, Software AG now says it’s out of the running. So it looks like we could very well be seeing an American company pick up another piece of the Old Sod. 

Irish-US M&A (year ending each Bloomsday)

Period Deal volume Deal value
June 16 2004-05 28 $1.2bn
June 16 2005-06 29 $3.8bn
June 16 2006-07 36 $1bn
June 16 2007-08 33 $860m

Source: The 451 M&A KnowledgeBase