After repeatedly spurning offers this winter from a midmarket CRM rival, Onyx Corp. today announced it has entered an agreement to be purchased by M2M Holdings Inc., a privately held company.
Bellevue, Wa.-based Onyx will make the transition to a private company in a deal valued at approximately $92 million -- $4.80 per share.
M2M Holdings is a holding company jointly owned by Battery Ventures VI L.P. and Thoma Cressey Equity Partners. Its primary asset is Made2Manage Systems Inc., an Indianapolis-based enterprise software and services company focused on small and midsized manufacturers.
The deal is a more of a private equity play than a way of combining Made2Manage's ERP and supply chain products with Onyx's CRM, according to Sheryl Kingstone, CRM program manager with the Boston-based Yankee Group.
"Made2Manage is targeted more toward the low end of the market and Onyx is not," she said. "Onyx can't sell into Made2Manage's base. They need to stay focused on CRM and go profitable."
By going private and eliminating the significant expense of complying with Sarbanes-Oxley regulations, Onyx can become more profitable and explore acquisitions of its own, Kingstone added.
"SarbOx is just huge for a company our size," Todd Chambers, Onyx's chief marketing officer, said. "We had $800,000 in Sarbox costs. That's a huge chunk out of our bottom line. The flexibility of being a private company allows us to execute our growth strategy."
Onyx has historically served the midmarket with its CRM application but has recently seen increasing pressure from enterprise application vendors SAP AG and Oracle Corp., which have both turned their attention to the midmarket. In fact, several midmarket CRM vendors have been swallowed up by larger firms and repeated offers from CDC Corp., a subsidiary of Chinadotcom, a Chinese enterprise software vendor. CDC's last offer had been for $50 million for controlling interest in the company. Onyx would have remained public.