In what is likely the most unexpected of circumstances, Vancouver-based CRM vendor Pivotal Corp. has found itself the target of an all-out bidding war.
The latest in a series of dramatic twists has placed CDC Software, a division of Hong Kong-based Chinadotcom Corp., as top bidder for the struggling CRM company. CDC on Monday announced it would pay Pivotal shareholders a choice of US$2 cash or US$2.14 in cash and Chinadotcom stock in exchange for each share of Pivotal stock.
Monday’s announcement trumps the previous bid made nearly two months ago by Oak Investment Partners, which offered Pivotal shareholders US$1.78 cash per share.
Initially, the CDC bid was rejected by Pivotal despite the cash premium offered. Pivotal went on the record to say that CDC’s offer did not represent a better value for Pivotal shareholders and customers because of the significant risks associated with the condition-laden proposal. However, CDC offered to speed up its own due diligence process and Pivotal agreed to negotiations with the company.
But, CDC is not the clear winner just yet. Pivotal is being held by its agreement with Oak and cannot accept CDC’s bid until Oak amends its offer. Oak has until Dec. 4 to make an amended bid.
If CDC’s proposed acquisition goes through, the company said it plans to use Pivotal’s marketing, sales, service and partner management capabilities and integrate them with CDC’s existing ERP, Supply Chain Management (SCM) and Human Resources and Payroll product offerings, which currently have limited CRM functionality. With the addition of Pivotal as its CRM platform, CDC Software will continue to implement its strategy of focusing on acquisitions with high margins and recurrent revenue streams in the mission-critical software solutions sector, the company said in a statement. It has been an interesting couple of months for the Canadian CRM solution maker. Prior to the CDC bid, Pivotal firmly rejected an additional offer made by Washington-based CRM vendor Onyx Corp.
Pivotal’s Special Committee will meet Dec. 8 to discuss the amended Oak bid as well as the CDC offer.