Down to the Last Click — Michael Ferro (Merrick) to Buy Back the Requisite Content Business?

According to a source and industry colleague I was able to trade emails with yesterday, it looks like the last remaining business unit of Click Commerce, the old Requisite content business, is about to find a not-so-new owner. Before getting into who it is, a few background components are probably in order for readers not familiar with the Click/Marlin/Emptoris saga. In a column from May, I wrote that "Marlin Equity Partners, Emptoris' owner, and Emptoris will soon announce that Marlin has acquired the majority of the assets of Click Commerce (three of the four business units) from ITW. One of these units, focused on services procurement, will be merged into their Emptoris asset."

At the time, the other two Click operating units became part of the Marlin portfolio, helping drive a roll-up strategy in service parts management, among other areas. But during their due diligence and offer, Marlin, for one reason or another, decided to pass on Click's content or master data management business. Click had originally acquired this asset by purchasing Requisite, one of the original providers of catalog content management capabilities in the eProcurement space, in addition to serving other verticals.

At the time, Click was run (and founded) by the gregarious and sometimes controversial -- he had his local detractors, especially after the tech blow-up in 2000 -- Chicago tech roll-up figure, Michael Ferro. Ferro ultimately ended up running Click not as an innovative tech firm, but as a conglomerate of loosely integrated -- even from a sales and marketing perspective -- tech holdings which underinvested in sales and R&D. However, he did create a profitable venture from this strategy and ended up selling out to ITW.

It looks like Ferro might be getting back into the Click game, however. According to my source, "The word on the street is that Ferro's Merrick Ventures has bought the last remaining Click Commerce business unit from ITW. This business unit comprises of the original Click (ecommerce) and the Requisite Master Data Management products." On the surface, this would seem like a rather shrewd move. To wit, "Ferro sells Click Commerce to ITW for a premium ... ITW divests 3 out of the 4 Click business units. They struggle with selling the 4th business unit ... Ferro buys back the 4th business unit for (I'm guessing) a fraction of the price he sold it for."

But how smart will the move prove in practice (vs. theory)? The MDM and content management space has greatly advanced itself in recent years and Requisite has been absolutely nowhere from an innovation and deal perspective, at least in the buy-side area. In fact, I can't point to a single deal they've been in over the past 18 months, at least as far as my source -- and I’m -- aware. In contrast, new players like jCatalog, with superior technical capabilities, have taken over as heirs to the procurement and sell-side content management space.

What will Ferro do having bought back Click? My source suggests that as a "Next steps, I'm guessing either they'll split the ecommerce and MDM pieces and sell them independently. Or, perhaps, they'll reposition the solutions in the Healthcare market and merge it with existing businesses in the Merrick portfolio." Regardless, it's clear that content management and MDM tools have a relatively short half-life without continued investment, just as the downfall of Click's buy-side MDM and content business shows. I believe that Ferro's time to rebuild commercial traction for the solution will quickly fade unless his team can move quickly, driving both R&D and sales investment (which, if history is any indication, is not something that's likely to happen).

Jason Busch

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