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Rediff.com  » Business » Talisma, Canada firm Pivotal to merge

Talisma, Canada firm Pivotal to merge

October 10, 2003 09:36 IST

Two significant players in the global customer relationship management space, the Vancouver, British Columbia, Canada-based Pivotal Corp and the Indian origin Talisma Corp, based in Kirkland, United States, are being merged in a deal steered by Oak Investment Partners, a private equity firm.

Oak is buying Pivotal for around $44 million in cash and then merging the Nasdaq-listed company with Talisma. The Palo Alto, California-based Oak is also an investor in Talisma, so it was a synergistic move.

As a result, the combined entity, to be called Pivotal globally and Talisma in India, will be in the top 10 of all customer relationship management software companies, and will command a market share of 4-5 per cent on the back of $75 million revenues, 2,000 customers and 700 employees.

It will be right behind the biggies led by Siebel (25-28 pr cent market share), SAP and PeopleSoft, Dan Vetras, CEO of Talisma and soon to be COO of Pivotal, told Business Standard in a conference call.

Bo Manning, current CEO of Pivotal, will continue to head the combined outfit.

The merger, which is expected to close by the end of the year, must be approved by Pivotal shareholders and the Supreme Court of British Columbia.

Analysts see this as a confirmation of two trends -- India based development going hand in hand with US based marketing, and increasing consolidation in the software space.

Manning and Vetras described the merger as a "meeting of minds" and coming together of two complementary firms which share the same Microsoft platform and a single code base. Customers who had to choose between two firms offering very similar products now do not have to do so.

Contrary to mergers where rationalisation leads to some redundancies, the combined headcount will remain virtually the same, very few will go and there will be full retention at the executive level.

"This is a growth story," said Vetras and added, the "India development part couldn't be brighter." Vetras told Business Standard in July that he saw further consolidation in Talisma's space "with ourselves being a long term player."

The company need not go public but could become part of a bigger entity. With VC backing, "we could even buy some company. We had made an offer for a traded company recently."

Talisma was created by Pradeep Singh by spinning off the product business from Aditi in 2000.

He had completely disengaged from Talisma earlier this year when Oak Investment came in, with Ranjan Chak becoming chairman of the company.

Just before that, Chak, who had headed Oracle's development operations in India and Asia, left to join Oak as a venture partner.

BS Bureau in Bangalore