During a media call that continues now, CA and Nimsoft executive team members described why CA paid $350 million in cash to acquire Nimsoft — or a bit more than 10 times Nimsoft’s 2009 revenue. Also, CA explained how Nimsoft will potentially help CA to move deeper into cloud computing and the managed services market.
Participants in the call included William McCracken, CA chairman and CEO; Nancy Cooper, executive VP and CFO; Chris O’Malley, executive VP of CA’s Cloud Products & Solutions Business Line, and Gary Read, Nimsoft president and CEO — who is joining CA. Among the highlights of the call, which I’ve paraphrased…
CA’s Perspective
From the CA executive team:
- The deal is expected to close before March 31.
- The deal adds a “high growth revenue stream” to CA.
- Nimsoft has delivered double-digit revenue growth in every quarter since 2004.
- The deal “broadens CA’s reach into the managed services market.”
- Nimsoft has 300 MSP partners, including hosting and cloud partners.
- Nimsoft represents a key opportunity for CA to address IT monitoring across public and private clouds.
- Nimsoft had $32 million in revenue for calendar 2009. Company was cash flow positive in each of the company’s most recent 4 quarters.
- Majority of Nimsoft’s employees will remain with CA after the transaction.
- We believe it enables us to achieve three goals: First, it expands CA’s market reach in emerging enterprises, MSPs and emerging global markets. Second, it gives CA expanded monitoring solutions. Third, it expands CA’s cloud strategy.
Nimsoft’s Perspective
From Nimsoft CEO Gary Read (who will remain with CA). Here again, I mostly paraphrase:
- We wanted Nimsoft to be a standard for emerging enterprises and MSPs.
- In the last couple of years, as cloud has been accepted as the architecture of the future, we’ve pioneered new methods of delivering IT services.
- We were concerned that Nimsoft, by itself, could not keep up. That’s why the CA deal makes so much sense.
Again, please note that the bullet points above are paraphrased from the phone briefing. Keeping up with the conversation — word for word — was challenging at times. But I think I captured the essence of the briefing.
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Posted In: Mergers & Acquisions | Remote Monitoring & Management Software | Software as a Service and Hardware as a Service
Tags: CA Acquires Nimsoft | CA Nimsoft | Managed Services Software | Nimsoft Acquired
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I think it’s “wishful” thinking that CA can structure a viable MSP offering going forward. Their overhead and size, I believe, will degrade the goodwill and presence Nimsoft has built to date. Just revisit past acquisitions and measure the success. Only time will tell, but I’d listen closely to the existing Nimsoft MSPs when CA starts to make its own presence felt.
Scott: I worked briefly for Cheyenne Software, which CA acquired around 1996. So I’ve seen (nearly…) first-hand how a product offering (Cheyenne ARCserve) can lose some channel momentum after a merger/acquisition. We’ll be checking in regularly to see how Nimsoft’s customers and partners feel about this deal… now, 3 months from now, and beyond.
I think the key think to watch is the relationship between Nimsoft’s Gary Read and CA’s Chris O’Malley. If they can see eye to eye, it will be a win for Nimsoft’s customer base.
-jp
With Garys departure you can bet on the continued decline of Nimsofts contribution to the CA bottom line.
I certainly hope that company knows how to back-pedal faster than their existing Enterprise customer base knows how to shop for new software!
AberFitch,
Constructive criticism and healthy debate are welcome. So thanks for posting. But let me offer the other side of the debate…
In the 1990s, I admit, CA botched a bunch of acquisitions and sometimes treated partners/customers poorly. When CA first acquired Nimsoft I was skeptical and wondered if CA would truly manage the company in a hands-off way that allows Nimsoft to thrive. Last I heard, Nimsoft had grown roughly 80 percent under CA’s ownership.
That’s impressive. Was the 80 percent growth purely from the foundation that Gary Read built? Or was the 80 percent growth from some of the investment and leadership that CA offered? Doesn’t CA deserve some credit for that growth?
-jp