The negotiations for the acquisition of Clicksoftware by Salesforce.com were called off after the parties failed to agree on a value for the deal, sources inform "Globes." Reports on the deal, in which the price discussion were believed to have been in the $1-1.5 billion range, were published six weeks ago.
Clicksoftware is fully owned by the Francisco Partners investment fund, which acquired it in 2015 for $438 million and delisted the company from trading on Wall Street. Francisco Partners acquires companies, improves them, and sells its holdings in them several years later. The failure of the negotiations is likely to lead Francisco Partners to offer shares in Clicksoftware on the stock exchange.
Prof. Moshe BenBassat founded Clicksoftware in 1996. The company develops a system for managing the repair service system of large companies: taking calls, sending hundreds of technicians, and monitoring the results of the visits. The system involves a great deal of mathematics and advanced algorithms aimed at streamlining activity and saving time, resources, and money, without detracting from customer satisfaction.
Francisco Partners moved Clicksoftware into the direction of providing services on the cloud. Salesforce was a key partner in this process, and Clicksoftware's services are already well integrated with Salesforce's services, so the synergy between the two companies is obvious. The deal between the two parties is therefor logical. The termination of the negotiations is not affecting the two companies' business partnership. Salesforce, a public company with a $124 billion market cap, is known for its acquisition-based growth strategy. Last year, it acquired Israeli company Datorama for $800 million.
Clicksoftware's CEO is Mark Cattini, former CEO of US company Autotask. After Francisco Partners acquired the company, Clicksoftware's management moved to Burlington, Massachusetts, while its development center, with 200 employees, remained in Kiryat Arie in Petah Tikva. Clicksoftware has a total of 700 employees. Among its major customers are Deutsche Telekom, communications company Telstra, and large gas and energy companies. According to IVC's figures, Clicksoftware's most recent reported revenue was $126 million in 2014. Its 2017 revenue is estimated at $200 million.
Francisco Partners' representative in Israel is former Alvarion CEO Eran Gorev. Gorev told "Globes" several months ago, "We're very satisfied with the investment. Following many conversations with employees and managers at the company, we saw clearly that Clicksoftware's technology was unique. We saw an opportunity to inject modern cloud DNA into the company."
A month ago, Francisco Partners announced the sale of its controlling interest in NSO according to the value of its activity (including cash and debt), which is believed to be nearly $1 billion. NSO founders Shalev Hulio and Omri Lavie led this acquisition in partnership with European private investment fund Novalpina Capital. Hulio and Lavie, who are believed to each own 10% of NSO, will invest $100 million in the deal, and NSO's management and employees will also invest in the company. The deal is a profitable one for Francisco Partners, which acquired control of the company for $130 million.
Francisco Partners previously sold its investment Ex Libris Group, another Israeli company, at a substantial profit. Other investments by the fund in Israel include SintecMedia and the R2Net jewelry website. Francisco Partners also led a $60 million financing round by Israeli company Redis Labs, which develops databases for advanced apps.
None of the companies involved responded to the report.
Published by Globes, Israel business news - en.globes.co.il - on February 27, 2019
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