IBM Plans to Buy DemandTec

IBM is planning to acquire consumer analytics firm DemandTec in a transaction valued at approximately $440m, or $13.20 per share. A number of shareholders have claimed that the transaction undervalues DemandTec and have legal teams investigating.

DemandTec's software and analytical services take a scientific approach to understanding consumer behavior, to help retailers and consumer products manufacturers. The company is based in San Mateo, California and has more than 350 employees, with additional offices in Minneapolis, London, Paris and Bangalore.

In March, DemandTec acquired predictive analytics software developer M-Factor, and in August it launched three new services, including an embedded shopper insights dashboard which provides forecasts for defined shopper segments.

IBM says the acquisition will extend its 'Smarter Commerce' initiative, by adding cloud-based price, promotion and other merchandising and marketing analytics to help clients better define the best price points and product mix based on customer buying trends.

Craig Hayman, the IT giant's General Manager of Industry Solutions, comments: 'Bringing science to the art of pricing and promotion is a big part of our strategy, and the combination of DemandTec and IBM will help marketing and sales executives in retail and other industries drive more revenue and increase profitability.'

The acquisition is subject to DemandTec shareholder approval, but a group of shareholders has already raised a question mark over the proposed sale price.

Their legal representatives are investigating claims that the Board of Directors have breached their fiduciary duties by failing to 'adequately shop' the company and maximize shareholder value, pointing out that stock traded as high as $14.07 per share in February. Additionally, the lawyers say that DemandTec CEO Dan Fishback and COO Bill Phelps (pictured) have already signed offer letters with IBM as part of the deal, and that they have agreed to a $14m termination fee which makes it unlikely that a superior offer will be forthcoming.

Web sites: www.ibm.com and www.demandtec.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.