Verticalnet Exits Stage Right — Boos or Bravos as BravoSolutions Acquires Them?

It's finally happened. After years of failed acquisition talks and shareholders disappointments, Verticalnet has finally been acquired. According to the Philadelphia Business Journal, "Verticalnet Inc. said Thursday it will be acquired for $15.2 million by BravoSolution SpA ... Verticalnet and BravoSolution anticipate the deal will close during the first quarter of next year ... If approved in its current form, the deal would result in the continuity of Verticalnet's present business under the leadership of the company's current management team, including Verticalnet President and CEO Nathanael V. Lentz, who would be in charge of BravoSolution's North American operations."

The eventual closing of this deal will mark the end of an independent rocky financial road for Verticalnet, a vendor whose products and solutions have in recent years had a better reputation than the company itself. Italy-based BravoSolution, the acquirer, had a decent but regional reputation in Europe, although their software products have never been well known. I suspect they'll adopt Verticalnet's platform as their technology solution while also leveraging Verticalnet as a beachhead to penetrate North America from a solutions and services perspective.

Perhaps the most important issue if BravoSolution is to have a future in North America with Verticalnet will be the need to overcome the financial reputation of Verticalnet's past. In the past year or so, this has damaged Verticalnet's opportunities in nearly a dozen deal cycles that I've been aware of. In these situations, Verticalnet was knocked out of consideration -- often before they knew about the opportunity -- not because of their solution reputation, but because of prospect concerns over their financial stability.

Stay tuned for further analysis of this deal early next week. Among other areas, I'll plan to tackle the depth and breadth of technology that BravoSolution is getting from Verticalnet.

Jason Busch

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