Equifax Buys Austin Tetra

OK, I admit that scooping the wire by a few hours is no accomplishment, but at least I got it right for once earlier this morning when I wrote that someone was buying Austin Tetra. It turns out that that someone is Equifax, the credit report reporting company. You can read the announcement on their site by clicking here. According to the press release, "Equifax acquired Austin Consolidated Holdings, Inc. (Austin-Tetra) in an all-cash transaction; other financial terms of the acquisition were not disclosed. Austin-Tetra will maintain its presence in Irving, Texas and its Founder and CEO, Phil Berkebile Jr., will remain with Equifax under a consulting arrangement during the transition. The rest of the Austin-Tetra team will join Equifax."

For many, Austin-Tetra was seen as a more economical way to cleanse their vendor master than the alternative, D&B. Others liked Austin Tetra's supplier diversity and other related content enhancement capabilities. Personally, I feel this deal is as important for what it will cause others in the market to do as much as for what Equifax will gain from its new supplier-focused operating arm. For Austin Tetra customers, I would expect a more transactional business model -- perhaps more like D&B -- where subscriptions to content are tough to negotiate, and refreshes are sold on an as-you-go basis.

From an investment perspective, this deal should be encouraging to young upstarts looking for outside capital. The market for supply-related content is huge, but few VCs that I've spoken with understand anything about it. But what they do see are dollar signs, and exits like this are a sign that the market is ripe for additional investment.

Other established vendors -- especially those partnered with Austin Tetra -- should look at this acquisition as a chance to completely reevaluate their own content-related Spend Management strategies. Vendors should ask themselves the following types of questions: What should we build? What should we partner for? What opportunities are there for new types of content such as risk-related intelligence or global supplier capability information? These questions are just a start, but this acquisition should serve to force even pure-play Spend Management software providers to think through the potential role of content in their future offerings.

From a competitive standpoint, I hope the deal kicks D&B corporate to invest more in their supply management business -- outside of their Open Ratings solution line. D&B has got such a huge opportunity when it comes to supplier content, but has been hamstrung over the years, beaten down by its own big-company approach to the market. Until its rather shrewd acquisition of Open Ratings, I all but counted them out as a serious future player. For additional analysis on D&B, you can read some of my previous posts on them here and here. I sincerely hope that this forces D&B's hand to invest more in what could be a massive business for them. Indeed, the supplier content opportunity in Spend Management is huge, and both Equifax and D&B are only scratching the surface of what is possible today. Perhaps these two will continue to be the dominant forces in the content game, or maybe we'll see a new provider take the market by storm. Stay tuned as my analysis of this acquisition -- and its market implications -- continues in the coming days.

Jason Busch

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