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Siebel buys firm focused on e-billing technology

The $115 million deal for Edocs is a bid to heat up tepid demand for CRM software.

Siebel Systems on Friday announced a $115 million cash deal to acquire Edocs, a company focused on electronic-billing and customer self-service technology.

Siebel, which sells so-called CRM software that helps companies manage customer relationships, expects the deal to help reverse weak demand for such technology by expanding its front-office offerings and boosting its presence in the e-billing and self-service applications market.

In a conference call with analysts, Siebel CEO Michael Lawrie said he believes customers will make significant investments in front office, or customer service, technology, given it's an area that largely is not integrated.

The acquisition marks the first for Lawrie as Siebel CEO. A former IBM executive, Lawrie was named to the CEO post in May, when founder Tom Siebel reduced his role to chairman.

Lawrie noted that Siebel may engage in more acquisitions down the line.

"We are always looking for potential acquisitions to fill out our portfolio...We look at buying versus building it ourselves," Lawrie said.

The deal is expected to close early in the first quarter. Siebel expects the acquisition will reduce its first-quarter earnings by approximately 1 cent per share.

Besides paying $115 million in cash to acquire the privately held Edocs, Siebel is also set to make additional payments in 2006, provided that Edocs reaches certain revenue and other milestones.

The Edocs acquisition will increase Siebel's presence in the telecommunications, credit cards and health care markets. Edocs customers include British Telecom, Harvard Pilgrim Healthcare and Toyota Financial Services.