The Snowball Keeps Rolling Downhill

The consolidation continues as e-discovery service provider FTI announced today that it signed a merger agreement to acquire Attenex Corporation, one of the pioneers in graphical analytics for ESI.  If you enjoy press releases, you can learn more here.

Comments

[The Scold]

Oh Craig, we LOVE press releases :)

Thanks for posting it!

[Sean Doherty]

With any merger, the parties hope that more will translate to more, not less. With a product portfolio consisting of Ringtail and Attenex technologies, FTI Consulting will certainly have more for customers in the short term. How that works out in the long run is often an M&A tale.

[Tom O'Connor]

Craig: now THIS is why technology is so meaningful in my life. Here I am sitting in the waiting room of a hospital and with the miracle of wifi, instead of reading year old People magazines instead I can read ... lit support company press releases!
Hmmmm.... People does have those cool photos tho ...and when did Tori Spelling get married?

[The Scold]

Tom, we aim to please; we aim to please!

Stay well!

[Monica Bay]

Clearwell's Aaref Hilaly writes about the acquisition on his blog here:

http://www.clearwellsystems.com/e-discovery-blog/2008/06/11/fti-consulting-acquires-attenex-for-88-million/

Here's the intro:
Assuming that you can buy each company for the same price, which would you acquire?

Company A has been in business 3 years, has 25 customers, no brand to speak of, and did about $5 million in revenue in the prior year; or,

Company B has been in business 7 years, has over 100 customers, a strong brand in its market, and is doing $25 million in annual revenue?

“No brainer,” you say, “obviously, Company B.” So it is that FTI looks to have got a great deal buying Attenex (Company B) today for $88 million, whereas Seagate looks like it grossly overpaid for Metalincs (Company A) which it bought for $82 million in December 2007. But things are not always as they appear, and there are good reasons why Attenex has sold for a paltry 3.5x revenue, a multiple well below the 16x commanded by Metalincs or even the 5x revenue that Iron Mountain paid for Stratify.