Hyperion acquires Brio for US$142 million

Hyperion Solutions Corp. announced on Wednesday its intentions to purchase Brio Software Inc. in a transaction valued at over US$140 million, making it the second acquisition involving business intelligence software (BI) companies in six days.

According to Hyperion – a provider of business performance management software – Brio shareholders will receive 0.109 of a share of Hyperion common stock along with US$0.363 for each share of Brio common stock. Once the transaction is complete, Brio shareholders will own 10.5 per cent of Sunnyvale, Calif.-based Hyperion.

Hyperion said that Brio, a Santa Clara, Calif.-based BI software company, will bring query and reporting capabilities to its platform, adding that it hopes Brio’s increased visibility gained as a result of the acquisition will increase the adoption rate of Brio’s products.

Due to Brio’s questionable viability in the market right now, the acquisition is sure to boost the company’s popularity and recognition among customers said Warren Shiau, a software analyst with IDC Canada Ltd. in Toronto. He added that Brio and Hyperion are a good pairing because there is no question about Hyperion’s long-term survival.

Shiau said that Brio has been spending its time trying to defend its install base and because there has been so much concern about the company’s viability, it has experienced a lot of turnover in its sales organization and management ranks making it difficult to go after new sales instead of just hanging on to what it had.

“So having the stability in there of being taken over by a company where nobody sees their survival as a problem right now should have, we can foresee it as having, the impact of shoring up Brio’s installed base [thus] preventing people from leaving,” Shiau said. “And then with Hyperion adding its sales resources onto Brio, it could potentially have the impact of helping [the company] start to grow in revenue terms.”

Shiau added that Hyperion’s announcement may have come in response to BI provider Business Objects Inc.’s acquisition last week of enterprise reporting software vendor Crystal Decisions. Inc.

“They’re probably sitting back and they are looking and saying, ‘okay, well Cognos is probably the leader now. Business Objects is strengthening its market position [by] buying Crystal Decisions. What can we do to increase our competitiveness or just gain a larger footprint in terms of install base?'” Shiau said.

Hyperion said that once the acquisition – which has already been approved by the boards of directors of both companies – is complete, the plan is to extend and continue to integrate the Brio platform with Hyperion’s applications.

The combined companies have more than 16,000 customers and approximately 2,700 employees. Combined revenues for the last 12 months total more than US$613 million.

Also announced on Wednesday, Hyperion signed an original equipment manufacturer (OEM) agreement with Brio, meaning that Hyperion will immediately begin reselling Brio’s enterprise reporting, query and analysis and dashboarding products to Hyperion customers.

The acquisition is subject to approval by Brio’s stockholders as well as regulatory approvals, and is expected to close in the fourth calendar quarter.

Hyperion can be found on the Web at www.hyperion.com. Brio can be found online at www.brio.com.