JPMorganChase Shacks up With Xign

Less than two and a half years after acquiring global trade provider Vastera, JPMorgan Chase is at it again on the Spend Management acquisition front. This time around their target was Xign, one of the leaders in the still nascent EIPP (electronic invoice payment presentment) space. But unlike Vastera, Xign has a universal reputation for delivering best in class capabilities (the verdict was still out on the software components of Vastera at the time of the last deal). Xign's philosophy around the payment space is to build tight linkages between a company's top or most strategic suppliers, rather than the unwashed -- or paper-based -- SMB masses. This is in contrast to other providers who typically focus on broader enablement as a primary objective.

Here are some of the details of the transaction in case you're interesting: "Under the Agreement and Plan of Merger, JPMorgan Chase will acquire all of the capital stock of Xign, as well as the company’s technology, services and Order-to-Pay domain expertise. The acquisition is expected to close in the second quarter of 2007, subject to regulatory approval. Terms have not been disclosed."

I'm guessing that Chase offered a fairly rich revenues multiple because of the increasing demand for -- and interest in -- EIPP of late. Also, given that American Express also has strong ambitions for the market as evidenced by their Harbor deal -- and I reckon that other banks are keen on the space as well -- you can bet that there was interest from multiple parties as the deal heated up. Stay tuned in the coming week as we take a closer look at this deal and whether EIPP is a better fit with financial institutions like Amex and JPMorgan Chase or whether software providers like Ariba will rule the day.

Jason Busch

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