CDC Software Acquires TradeBeam
May 24, 2010 Comments (0)
CDC Software Corporation, a hybrid enterprise software provider of on-premise and cloud deployments, has acquired TradeBeam, a leading provider of on-demand software as a service (SaaS) supply chain visibility and global trade management solutions.
CDC Software and TradeBeam share several common customers and TradeBeam represents CDC Software's largest SaaS acquisition to date. This acquisition also represents CDC Software's latest move to expand its growing portfolio of cloud-based solutions and increase recurring SaaS revenue significantly during the next few years.
With this acquisition, CDC Software plans to integrate TradeBeam's SaaS applications into its CDC Supply Chain product line, which is expected to help customers improve supply chain visibility and automate their import and export global trade management and compliance processes. TradeBeam also offers additional cross-sell opportunities for CDC Software's enterprise solution customers, who source and sell globally. In turn, Tradebeam customers are expected to benefit from CDC Ross ERP, CDC Factory's manufacturing operations management solutions, CDC ActivPlant's enterprise manufacturing intelligence solutions, and CDC eCommerce's multi-tenant eCommerce platform for retailers and brand manufacturers.
TradeBeam provides SaaS solutions for import and export compliance, global sourcing, collaborative forecast and inventory visibility, supply chain event management and global trade finance. TradeBeam holds several patents in its technology and has more than 1,000 customers with users in more than 100 countries worldwide.
CDC Software believes that global trade management is a growing market primarily due to economic globalization, increasing global trade volumes, including new revenue markets in developing countries that offer low cost material and labour resources. According to the Global Trade Management Worldwide Outlook report in 2008 by ARC Advisory Group, the global trade support market is expected to grow from more than $600 million in 2009 to more than $800 million by 2012, a compound annual growth rate of 10 percent. Also, TradeBeam and Stanford University recently completed a joint study on the benefits of global trade automation, "How Enterprises and their Trading Partners Gain from Global Trade Automation: A New Process Model for the China-U.S. Trade Lane." The research found that, in many cases, companies could gain dramatically by implementing global trade best practices and accompanying automation resulting in increased profitability by 10-40 percent, among other improvements.
"This is a very synergistic combination on many fronts,'' said Edward Flaherty, CEO of TradeBeam. "Our solutions are a great fit for CDC Software's growing installed base, especially with its CDC Supply Chain and CDC eCommerce products and their market presence in complementary vertical industries such as automotive, medical device and retail industries. We expect that TradeBeam and its customers will benefit immensely from the global breadth of CDC Software's technology and business infrastructure, especially their extensive operations in China, and the company's broad portfolio of complementary solutions. In fact, parts of the Chinese government are already users of TradeBeam's import and export compliance solutions."
"We believe the global trade management market will continue to see strong growth and offer us numerous revenue opportunities since companies are selling more and more of their products globally and increasingly moving their manufacturing and sourcing offshore," said Bruce Cameron, president of CDC Software. "Like many of our past acquisitions, TradeBeam fits into CDC Software's disciplined acquisition criteria and is expected to be earnings accretive immediately. We also believe our margin will expand further as we take advantage of more cross selling and cost savings opportunities when TradeBeam is fully integrated into CDC Software's global business and technology platform."
Cameron added, "Tradebeam and CDC Software share many complementary verticals markets, including financial services, retail, medical and high-tech and logistics, which we expect will present strong cross-sell opportunities. We are especially pleased to see signs of a rebound in the global automotive market, especially in China. Notably, we also share mutual customers such as General Motors, Johnson Controls, Inc., Renault and Stryker. We believe that TradeBeam technology, with its numerous patents, is an excellent addition to our already strong SaaS product portfolio and that it will help us further increase our recurring SaaS revenue. We believe our forward-thinking goal of reaching 70 percent of revenue coming from maintenance and recurring SaaS revenue in the next few years will help position us solidly for long-term growth and further enhance the value of the company for its stakeholders."
Revolution Partners, a division of Morgan Keegan & Company, Inc. acted as financial advisor to TradeBeam, while Morgan, Lewis & Bockius LLP provided legal counsel to TradeBeam.
Since late November 2009, CDC Software has made great progress in its strategy in the SaaS arena with the acquisitions of gomembers, Truition and Computility and is planning more. The company has also made strategic investments in more SaaS companies via its Strategic Cloud Investment Partner Program, such as eBizNet.