SciQuest acquire Spend Radar

On Friday, SciQuest announced that they are buying Spend Radar in an agreed deal. SciQuest announced an agreement to acquire Chicago-based spend analysis provider Spend Radar. According to the press release, SciQuest has "entered into a definitive agreement to acquire Spend Radar LLC for about $8 million in cash and $2 million of stock. The company may also make additional payments of up to $7.5 million consisting of cash and stock if Spend Radar achieves certain revenue performance targets over the next 5 quarters. The transaction is expected to be complete on or about October 1, 2012."

SciQuest started with eProcurement (P2P) solutions. In a similar manner to Science Warehouse in the UK, they have particular strengths in providing catalogue and other P2P solutions in environments like universities and science organisations where requirements can be very complex.  Spend Radar are a well-regarded spend analytics firm – still fairly small and you may not have heard of them, but much of their work is behind the scenes for major consulting firms and similar. My US colleagues rate them highly from both a technology point of view and because of their respected senior management team.

Neither firm has a major European presence, but SciQuest has made a number of what appear to be intelligent acquisitions, filling in gaps in their portfolio and moving towards a complete spend management suite.  They’re a publically quoted company, having floated in September 2010 on Nasdaq, and already since then they have bought AEC Soft, who specialised in supplier information management, and more recently Upside, a well-regarded contract management software provider.

However, as Jason Busch (my colleague at Spend Matters US) points out in his Spend Matters PRO piece, (see link below), it is one thing to acquire these different solutions, it is another to integrate them successfully from corporate, marketing and customer-centric standpoints.  That’s not to say for a moment that SciQuest won’t be able to do that – but it’s too soon to assume success.

As we said, it’s fair to say neither firm has seen Europe as a major priority up to now. Whether this will change given the increased scale of the firm is a good question. And if they do want to make that transatlantic move, do they do it by acquisition or organically?

Jason has written a more detailed analysis of the deal here. And you can get an even more in-depth view if you subscribe to Spend Matters PRO, our subscription service.

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