In the earlier posts in this series, we examined Hubwoo's recent product enhancements and solution roadmap – as well as the current capital market situation they find themselves in following SAP's planned acquisition of Ariba. To summarize the last post, it's our belief that given Hubwoo's current valuation (at the time of a recent Spend Matters PRO article: How Has the SAP/Ariba Deal Affected Other Firms' Stock Prices?), that the SAP procurement BPO and network partner is likely to be acquired. There are many potential suitors who could either:
- Do a revenue arbitrage of Hubwoo's potential higher valuation network volume and SAP-focused revenue (not the legacy business revenue, which continues to decline) and either keep Hubwoo's solutions or migrate customers onto their own. This might be attractive to organizations such as Basware, TradeShift, IBX/Capgemini, Infosys and others in the e-invoicing sector
- Use the Hubwoo customer base and SAP relationship (as long as it continues throughout the length of the BPO agreement) as a means to up-sell other solutions (owned by a potential acquirer). This option may be attractive to offshore BPO firms with existing SAP partnerships
- Take Hubwoo's solutions into their own customer base as an up-sell opportunity. This option may be attractive to offshore BPOs as well
Simply put, at current valuation levels, it's our hypothesis and opinion that the Hubwoo asset, even if it has a finite lifespan left until the privileged relationship with SAP ceases to be as privileged at some point in the future, is unlikely to stay independent for the next six months. Fortunately, if Hubwoo does become part of another organization, the ultimate suitor will also find itself not just with a specialized set of solutions to surround SAP procurement initiatives, but also a highly commercially oriented and talented team that knows a thing or two about selling into SAP-centric procurement organizations.
Does anyone else have a different opinion than us on the subject of what will happen to Hubwoo?
Our Hubwoo coverage will continue – expect more articles toward the end of September.