Iasta and Selectica – still in the honeymoon period, or is anyone throwing things yet?

It seems like yesterday, but it is actually seven weeks since the acquisition of Iasta by Selectica. Seven weeks! That seemed long enough to make it worthwhile quizzing one of our friends from Iasta about how things really are inside the acquired firm. Not always nice, being acquired, so I offered my informant the chance to go “off the record”. But Mike Pringle, who has held senior roles in Iasta across Europe, was in fact happy to talk freely and on the record.

So I first asked him how he generally perceived the deal.

“It looks good, certainly for the Iasta team in Europe. Selectica didn’t have much presence here, just a handful of staff in Germany, so we really see it as an opportunity to cross-sell the products, and to grow the team here”.

But if Selectica didn’t have much European business, where do the cross-selling options come in?

“They have some US clients with substantial European operations, so there is an opportunity there. And they have one huge UK retail client too. And of course we can offer the Selectica product to the Iasta customer base”.

So what do you think really drove the deal?

“My feeling is that the Gartner “strategic sourcing applications suite” magic quadrant has a lot to do with it. Iasta is well rated overall, but contract management was identified as a relatively weak area. And that is of course Selectica’s core capability. The products are very complementary, we can run Selectica data through the Iasta procurement business intelligence engine, or we can upgrade clients from the Iasta contract management “light” product on to Selectica when they’re ready for something deeper”.

So staff are feeling positive?

“Very much so. We’re getting a good response from Iasta clients so far, which is encouraging for staff. And there are some tangible benefits for us. There are many positives about working for Iasta, but equity in the firm was very tightly held between the founders of the business, so there was no culture of share schemes or options, even for senior management. Selectica is quite different as it’s a public company quoted on NASDAQ. So many of the European team are now getting or have the chance to acquire Selectica equity - which is very motivating”.

What about the Iasta top team?

“At the moment, the strategy is that Iasta continues to be run by David Bush and the top team as before. Iasta, a Selectica company is the strap line, as the intent is for Iasta to continue to have its own identity within the Selectica group. Of course that might change – we’ll have to see. David might take a wider role, perhaps. But as the announcement said, he and his fellow Iasta shareholders have taken a fair chunk of Selectica equity as part of their payment so we do think they intend to stick around! And my boss, Sean Delaney (VP, Global Sales) is actually moving to the US, so I’m likely to take a wider role in Europe”.

So summing up, this doesn’t feel like a conventional take-over type acquisition, more a genuine partnership of complementary businesses. There are certainly some cross-selling opportunities, but we’ll have to wait and see how real that proves to be. But the addition of Selectica certainly strengthens Iasta’s position in the market. Integration of the firms appears straightforward, with not too many tricky decisions, and staff seem well motivated towards the deal.

Of course there are often factors that are hard to perceive from outside, which could come back to bite the new business. But at the moment at least, the prognosis for this deal looks positive for the firms involved and for customers.

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