Breaking News! Emptoris acquires Rivermine, leading Telecoms expense managers

Emptoris, one of the global leaders in sourcing, contract management and spend analytics software have acquired Rivermine, a leading US based Telecoms Expense Management (TEM) provider.  It is a very friendly deal, with no headcount reduction planned; I've spoken to a senior Rivermine guy who is delighted by the move.  The Rivermine capability fits well but will be additional to Emptoris' existing product range; and the two firms don't even have much overlap in terms of customer base.  It takes Emptoris further into offering strong products in the area of complex services procurement, adding telecoms to their existing capability in areas such as contingent (temporary) labour and professional services.

Rivermine have grown strongly from their base in Fairfax, Virginia over the last few years and focus on 'Global 1000' customers.  So they are not widely known in Europe, with their customer base mainly comprising the European operations of large US firms such as Ford and Chubb Insurance.  Having said that, Sodexho are a large client and through one of their consultancy 'partners', they've recently closed a big deal with a very well known UK based organisation.

But a big appeal for both parties is the ability of Emptoris to use their exisitng client relationships and sales channels to push the Rivermine solutions harder this side of the Atlantic.  I suspect for instance there are a few UK Government Departments that will be getting a phone call soon offering a demo!  And given the size and importance of telecoms spend to large public sector organisations, it might be a worthwhile meeting.

Rivermine products "help organizations to gain visibility into, and control over, their telecom spend and lifecycle management including ordering, inventory, invoice processing and auditing, as well as wireless expense management, mobile device management, reporting and analytics".  Although they do have subject matter experts who offer consulting-type support when needed, they are primarily a software firm, providing solutions via SaaS, a managed service, or installed behind the clients firewall (and given the sensitivity of Telecoms, that isn't unusual).

They reckon about half their sales go through the procurement function; half through IT, but their feeling is that procurement is taking a stronger role in this category.  In fact, from our conversation, it seems that procurement functions in Eupore may perhaps already have greater penetration into the telecoms category than their professional colleagues in many US firms.

Rivermine also appear to be technology leaders; for instance, their "Real-time Wireless Usage Management (RWUM)" solution: "includes an agent that is resident on corporate-liable mobile devices to monitor, report and control usage. Alerts can be automatically sent to employees or the IT department when usage thresholds are met..."  That might sound a little 'big brother' like; but brilliant if you want real spend control.  When I was a CPO there were telecoms consultants around, but they tended to be small firms with a couple of knowledgeable guys and a big Excel spreadsheet.  Technology has clearly moved on a bit since then!

The value of the deal isn't disclosed, as these are both privately owned firms, but Marlin Equity Partners who are Emptoris' major shareholder have funded this and re-stated their commitment to the firm.  In size terms, it takes Emptoris up to over $85 million revenues (according to industry sources) so it is a substantial addition.  But keep an eye out for more info from Jason at Spend Matters US later today, including I suspect some of the numbers in more detail.  (9am update; good stuff already posted on US site).

At first site, this looks like a deal that is good news for both parties and for the exisiting customers of both parties; arguably quite unusual in that respect!  But we'll come back to this with two more posts in the next couple of days; one looking at what this might say about the Emptoris strategy and market positioning; and another looking at Rivermine and Telecoms procurement in more detail.

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