E.piphany Inc. (Nasdaq: EPNY), a maker of customer relationship management software, said Wednesday it would acquire privately held Octane Software, Inc. in a stock swap valued at roughly $3.2 billion.
Shares of E.piphany closed at 248 15/16 Tuesday.
Under the terms of the deal, E.piphany will issue about 12.8 million shares of its common stock to the shareholders of Octane. Octane shareholders will have a 26.5 percent stake in E.piphany. The transaction will be accounted for as a purchase.
Octane makes next-generation customer care applications for sales, service and support. The Wall Street Journal reported Octane had $3 million in revenue for 1999.
E.piphany contended that the acquisition of Octane will give the combined company a full suite of customer relationship management (CRM) software. The CRM sector is hot with established players such as Siebel (Nasdaq: SEBL) and Oracle (Nasdaq: ORCL) battling upstarts such as Kana Communications (Nasdaq: KANA) and BroadVision (Nasdaq: BVSN).
The combined company will have more than 125 customers, including American Express, Autoweb.com, Charles Schwab & Co., Compaq Computer Corp., Critical Path, GTE, Hewlett-Packard Company, Internet Capital Group Inc., Procter & Gamble and WingspanBank.com.
In a statement, Roger Siboni, president and CEO of E.piphany, said combined companies will be a threat to established players. Siboni called the merger a "defining moment for the entire CRM market."
The combined company will have 500 employees. E.piphany said more details would be available when it files a proxy with the Securities and Exchange Commission. Both companies are based in San Mateo, Calif.
E.piphany went public in September priced at 16. E.piphany has also completed a secondary offering.
For the quarter ended December 31, 1999, the company reported revenue of $8.7 million and an operating loss of $5.6 million.