Jaggaer and Pool4Tool Get Together – Another Powerful Player in the Procurement Tech Market

Last Friday, Jaggaer and Pool4Tool announced that the two firms are merging. Jaggaer as you may remember is the new-ish name for what used to be SciQuest, which itself had previously acquired some well-known firms in our industry such as CombineNet. The firms claim that “the merger positions JAGGAER as the only eProcurement company with a global footprint that offers complete, end to end indirect and direct spend solutions.” 

This is an interesting and apparently synergistic tie-up that does expand the technology and solutions capability of each partner significantly. It also looks sensible and complementary from a geographic point of view. SciQuest never really cracked Europe, and Jaegger’s centre of gravity is still very much in the USA, whereas Pool4Tool is an Austrian firm, quite strong in the US but particularly strong in Germany and neighbouring territories.

According to the announcement, CEO Thomas Dieringer, and COO Michael Rösch, will continue to operate the company out of its Vienna, Austria offices, while overseeing a staff of 150 based in Europe, Asia and the Middle East.

In terms of product synergy, Pool4Tool is well regarded particularly in direct materials eProcurement, with strong capability in areas such as catalogue and master data management. That explains a customer base that is manufacturing industry dominated, while Jaegger probably has a wider spread of sectors amongst its customer base. Here is what the firms themselves had to say.

“POOL4TOOL brings over 300 new clients to JAGGAER, with the combined company providing products and services to over 900 organizations. Collectively JAGGAER and POOL4TOOL will have a strong commercial footprint in manufacturing, transportation, retail, life sciences, consumer packaged goods and higher education. JAGGAER and POOL4TOOL’s customer base now encompasses three Fortune 10 companies and 20 Fortune 100 companies processing $65 billion in annual spend on a network of over 2 million suppliers”.

The procurement tech market really is hotting up, with corporate activity (acquisitions, investment and financing) from Coupa, Ivalua, BravoSolution, Basware and others in the last year or so. The battle appears to be around the provision of spend management “suites” that incorporate purchase to pay, sourcing, analytics and other tools on a single platform.  Classical business theory would suggest that there isn’t room for too many firms to operate profitably in this market – maybe four or five?

So who will survive and come out on top? With this move, Jaegger looks better positioned to emerge as one of the winners rather than languishing amongst the also-rans. But it is early days, and as always, post-acquisition integration and development of new operating models for the merged business will be key to their success.

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