ISG International Software Group, Ltd. (NASDAQ:SISG), today announced an agreement in principle to acquire MedaTech Information Technology Ltd. (MedaTech), including 70 percent of its wholly owned subsidiary Insol Ltd., a provider of B2B system integration services and sales targeted at the e-Business market.
Under the terms of the agreement, ISG will purchase all of the outstanding shares of MedaTech for $7.8 million in an all-stock transaction. The transaction, which is scheduled to close by March 31, 2000, is subject to the completion of customary due diligence and regulatory approvals. The management of MedaTech and Insol will continue as employees of ISG after the acquisition.
This acquisition follows the acquisition of Bridges for Island that is expected to close in the next few weeks. ISG's strategy is to take advantage of its new technology leadership in the B2B market by continuing to expand its sales channels and systems integration capacity through additional acquisitions in selected geographic markets.
Arie Gonen, CEO of ISG, commented: "The acquisition of MedaTech, with its current installed base of over 100 customers, a staff of more than 50 e-Business specialists and current revenues of over $4,500,000, combined with ISG's customer base, immediately expands our ready market and channel capacity to sell and service ISG's B2B software in Europe and Israel, MedaTech's principal areas of operation"
Gonen continued to state that the potential cost savings associated with coordinating transactions among suppliers and commercial alliance members is driving the market for B2B software solutions. These savings are estimated to be approximately 25 percent of the $1.3 trillion value of Internet B2B transactions forecasted by 2003. In support of that activity, analysts project that the market for B2B integration software, such as ISG's, will explode from less than $600 million in 1999 to over $13 billion by 2003. It is ISG's plan to become a leader in the B2B market by leveraging our technology leadership by expanding our worldwide sales force and services organization."
"We are very excited about the opportunity to join forces with ISG to expand our market share in the rapidly growing B2B solutions market," said Meir Gabay founder and president of MedaTech. "Powered by ISG's B2B software arsenal, our customer base and certified B2B professional services staff, is well positioned in Europe and Israel to be able to capture the exploding demand for B2B implementations."
Published by Israel's Business Arena on March 13, 2000.