Divine grabs Delano for CRM boost

Toronto-based customer relationship management (CRM) software vendor Delano Technology Corp. was acquired by Chicago-based software maker divine Inc. this week in a stock merger valued at approximately US$33 million.

Delano’s CRM, campaign management, and e-marketing software offerings will deepen divine’s reach in multi-channel Internet marketing, call center management, and Internet and telephony-based CRM, according to divine officials.

Last year, Chicago-based divine gobbled up more than 30 companies, pulling under its belt technologies such as content management, search, collaboration, and CRM.

Divine’s vision is to provide the technology and services to enable what it terms the “extended enterprise,” in which IT systems pass beyond the corporate boundaries to reach customers, partners, and suppliers, according to Andrew “Flip” Filipowski, chairman and CEO of divine.

CRM and campaign management are emerging as critical elements in this vision as external technology systems become representative of a corporate brand, he said.

The combination of Delano’s CRM technology with divine’s existing line of collaboration, interaction management, content management, and Web services offerings will “give the customer the answer of how best to manage campaigns that reach out to their customers and suppliers to make sure they make more money on the top line and save as much as possible on the bottom line,” said Filipowski.

Tough market conditions coupled with rapid consolidation in the CRM space forced Delano to consider merging with another smaller player in the same space or to shop around for a buyer, said Vikas Kapoor, CEO of Delano, in Toronto.

He said the company engaged in discussions with CRM leaders such as Seibel and SAP but decided there was too much perceived product overlap.

A deal with SAP or Seibel “would strip us of assets and wouldn’t yield a great outcome from a shareholder perspective,” he said.

From a technology standpoint, Delano’s fit with divine is strong with very little overlap, Kapoor said.

“Delano has potential to be the glue for a lot of what divine wants to achieve in the interaction management area,” he said.

In response to concerns about divine’s potential delisting from the Nasdaq Stock Exchange, divine’s Filipowski said the delisting issue is easy to solve and does not accurately reflect the value of the company.

“We have every other characteristic that complies with Nasdaq, other than share price, such as market capitalization,” he said. “We think by the time we are displaying our third and fourth quarter [numbers,] our stock will be significantly above a dollar. If it is isn’t we have a simple reverse split tactic that will solve the problem.”

divine’s acquisition of Delano is scheduled to be completed by the end of May, pending shareholder approval.