Two leading providers of web analytics technology are becoming one, as Omniture Inc. has announced a deal to acquire rival Visual Sciences Corp. Inc. for approximately $394 million in cash and stock. Visual Sciences disclosed in July that it had been approached by potential buyers and had retained investment bank Goldman Sachs as an advisor.
It’s a good deal for Omniture “as it will eliminate its most formidable competitor and provide the scale necessary to drive material operational efficiencies and profitability,” wrote Friedman, Billings, Ramsey & Co. stock analyst David M. Hilal in a note to investor clients.
Hilal warned the deal could face antitrust scrutiny, although he thinks it will ultimately go through. “On one hand, the current market is fragmented, with a number of players, and new entrants, such as Google and Microsoft, could become strong competitors,” he wrote. “On the other hand, the acquisition of Visual Sciences would join together the two largest pure-play Web analytic providers in the industry.”
Both Omniture and Visual Sciences count major online retailers among their clients. Omniture’s 2,500 customers include eBay, Wal-Mart, Microsoft, Neiman Marcus and Hewlett Packard. Visual Science has 1,590 clients, including Macy’s, AutoZone, Best Buy, NHL.com, Peruvian Connection and eBags.
“With the tremendous growth opportunities we see in the online optimization market, we believe that in addition to being financially accretive to our shareholders, this is a strategic investment that will drive increased value for customers and partners,” says Josh James, Omniture CEO. “We are facing a very significant opportunity defined by the rapid growth of online advertising and online business in general. This acquisition enables Omniture to accelerate our investment in advanced solutions that drive customer success as well as create further opportunities to cross-sell our growing portfolio of products to a combined customer base of more than 4,000 customers.”
“Omniture is a leader in online business optimization, and absolutely the right company to leverage our technology and resources for the benefit of the industry,” says Jim MacIntyre, CEO of Visual Sciences. “The combined company will provide our customers with a richer solution set, faster innovation and greater access to unique industry and business expertise.”
The companies say they expect the deal to close in early to mid-2008, pending approval by shareholders and regulators.
Omniture reported record second-quarter revenue of $33.5 million, up 78% from the same quarter a year earlier. The company plans to report third quarter results Tuesday. Visual Sciences reported Q2 revenue of $19.7 million, a gain of 29% from the same period a year ago.
Wall Street seemed happy with the deal. Omniture’s stock price was up more than 14% and Visual Science’s more than 13% in late trading today.
Back...
