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SSA Global picks off Epiphany

Enterprise planning specialist agrees to buy CRM software maker Epiphany in a marriage of midmarket applications providers.

SSA Global Technologies continued its long-running buying spree on Wednesday, agreeing to purchase CRM software maker Epiphany in a $329 million deal.

For Chicago-based SSA, which specializes in business management applications for the manufacturing and retail industries, the Epiphany deal marks the latest in a string of acquisitions over the last several years. The most notable of those deals was its buyout of rival ERP (enterprise resource planning) specialist Baan for $135 million in July 2003. Other companies swept up by SSA, which has focused its efforts primarily on the midsize business market, include EXE Technologies, Elevon, Ironside Technologies and Infinium Software.

Under the terms of the deal, announced after market close Wednesday, Epiphany shareholders will be paid $4.20 per share. That's a 7 percent premium over the $3.92 closing price of Epiphany shares on Wednesday.

Epiphany, based in San Mateo, Calif., markets CRM (customer relationship management) sales, service, marketing and analytics software for midsize companies.

In addition to announcing its acquisition, the company reported second-quarter earnings Wednesday, posting a loss of $8.3 million for the period ending June 30, compared with a loss of $3.6 million for the same period last year.

SSA executives pointed to the two companies' similar strategies around service-oriented architecture (SOA)--a method for building so-called composite applications from pieces of various software systems--as one of its primary reasons for buying Epiphany. Both companies have also embraced the Java 2 Enterprise Edition (J2EE) development standard in building their products.

Based on the acquisition, SSA said that it will now be able to offer a more complete package of enterprise applications, including a number of ERP and CRM tools. By moving into the so-called enterprise suite arena, SSA will now compete directly against market leader SAP, as well as Oracle, and rival midmarket specialists including hosted applications provider NetSuite.

SSA executives said that by joining their company, Epiphany will have a wider distribution network than it has had access to in prior years.

"CRM is an important growth market, and Epiphany has innovative solutions that are highly respected for their robust functionality, technology infrastructure and ease-of use," Mike Greenough, chief executive of SSA, said in a statement.

The companies said they expect the all-cash transaction to close before the end of October, based on winning the approval of Epiphany's shareholders.