M&A Alert—December 23, 2010
Teradata Buys Aprimo, An Integrated Marketing Management Specialist
Transaction Size: $525mm
On December 22nd, 2010, Teradata Corp. (NASDAQ: TDC, market cap: $6.8b) acquired Aprimo Inc.
Aprimo provides marketing software and solutions which enable marketers to efficiently automate, deliver, analyze and manage their multi-channel marketing campaigns. For example, chief marketing officers can use Aprimo’s software to track and target online, offline and mobile marketing campaigns to relevant customers, and manage marketing budget, workflow and resources to ensure efficiency of their campaigns. Competitors include Unica (IBM), ExactTarget, Marketo, Alterian, ATG and Responsys. Founded in 1998, Aprimo is based in Indianapolis. Aprimo has raised $47mm in funding from Blue Chip Venture Company (Don Aguilano), MK Capital, Staenberg Venture Partners, Sigma Partners (Robert Davoli), Lighthouse Capital Partners and Frazier Technology Ventures. Aprimo’s clients include 36 of the Fortune 100 companies.
Teradata Corporation (NYSE: TDC) is a leading provider of enterprise database software and analytics, enabling companies to effectively store, extract and analyze data so they can make intelligent business decisions in their strategic and operational initiatives. Competitors include Oracle and IBM (which recently acquired Unica, a multi-channel marketing management specialist, in August 2010 for $490mm at 4.1X LTM revenue). Mike Koehler, President and CEO, and Darryl McDonald, EVP, Business Development and Marketing, were the key executive sponsors of the acquisition.
Teradata is acquiring Aprimo for $525mm which includes approximately $25mm of cash on Aprimo’s balance sheet. Teradata mentioned Aprimo will generate approximately $80mm in 2010 revenue.
Enterprise Value $500mm1
EV/TTM Revenue 6.3x
1) Assumes Aprimo’s net cash of $25mm
This transaction is about expanding Teradata’s marketing-related data services offerings. Prior to the acquisition, Teradata already offered various marketing data analytics such as marketing and sales data management, marketing analytics/ROI measurement and customer relationship management. Aprimo offers valuable capacities to manage integrated marketing data and intelligence, consisting of information relating to customers and products, from multiple channels including online, offline and mobile, which can be further leveraged into various analytics and intelligence offerings.
Architect Partners’ Observations
This is another transaction that highlights the importance of multi-channel marketing. Given the explosive growth of online and mobile marketing, enterprises are looking to efficiently leverage data from their online, offline and mobile marketing campaigns. Enterprise IT providers such as IBM (which already acquired Unica in August 2010), Oracle (via their Siebel offerings), EMC, HP and SAP are now looking to accommodate these emerging needs.
Forrester projects interactive marketing (including online and mobile) to increase from $26b today to $55b in 2014. Teradata mentions that the Integrated Marketing Management (IMM) business is a growing, $5 billion sector. According to Gartner, companies that develop an Integrated Marketing Management strategy will deliver a 50 percent higher return on marketing investment.