Feeds

Synavant: shrinking prize in CRM niche battle

Five takeover bids for hugely unsuccessful company

  • alert
  • submit to reddit

Maximizing your infrastructure through virtualization

Synavant has received five takeover bids in the last six weeks.

The latest bid from Dendrite marks what has now become a ferocious battle to dominate a niche CRM market serving pharmaceutical companies selling to healthcare professionals. Synavant's revenue has been in decline for the past three years but, for the bidding parties, the additional market share is worth the cost.

Dendrite has made a third bid for Synavant as it seeks to beat off a challenge for control of the company from Cegedim. With the prospect of a further bid in the pipeline, Synavant's directors have made no comment on Dendrite's latest offer of $3.22 a share, which values the company at $48.9 million.

The battle for Synavant began in March when the company agreed to sell its global interactive marketing business to Cegedim for $43.5 million in cash. Just a few weeks later, Synavant said it had agreed a deal for Cegedim to buy the whole company for $2.30 a share in cash, a premium of 44% over the closing price before the announcement.

Dendrite then put in a bid of its own, of $2.50 per share, and filed a court complaint against the Synavant-Cegedim merger agreement on the grounds that Synavant's directors failed to conduct negotiations with Dendrite in good faith.

But there are few disputes that cannot be solved with a large pile of cash and by May 9 Synavant said it had accepted a $2.83 a share offer from Dendrite and, as part of the deal, legal proceedings were dropped.

On May 14 Cegedim upped its offer to $3.15 a share. It took only 24 hours for Dendrite to increase its bid to $3.22. There is no sign that the bidding is over.

What is extraordinary about the whole saga is that Synavant is a hugely unsuccessful company. By coincidence, it revealed Q1 figures last week that showed a loss of $7.5 million, up from a loss of $1.9 million, on revenue that dropped 22% to $34.8 million.

Synavant's revenue has been on the slide for the past three years. But for Dendrite and Cegedim, it is worth paying a lot more than its current apparent value for the additional market share and to keep Synavant out of the hands of their major competitor.

© datamonitor logo

Datamonitor is offering Reg readers some of its technology research FOC. Check it out here.

The Power of One eBook: Top reasons to choose HP BladeSystem

More from The Register

next story
Sysadmin Day 2014: Quick, there's still time to get the beers in
He walked over the broken glass, killed the thugs... and er... reconnected the cables*
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
SHOCK and AWS: The fall of Amazon's deflationary cloud
Just as Jeff Bezos did to books and CDs, Amazon's rivals are now doing to it
BlackBerry: Toss the server, mate... BES is in the CLOUD now
BlackBerry Enterprise Services takes aim at SMEs - but there's a catch
The triumph of VVOL: Everyone's jumping into bed with VMware
'Bandwagon'? Yes, we're on it and so what, say big dogs
Carbon tax repeal won't see data centre operators cut prices
Rackspace says electricity isn't a major cost, Equinix promises 'no levy'
Disaster Recovery upstart joins DR 'as a service' gang
Quorum joins the aaS crowd with DRaaS offering
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.