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Ariba to Acquire Quadrem

Ariba, Inc., a provider of collaborative business commerce solutions, will acquire Quadrem, a privately-held provider of one of the world's largest supply networks and on-demand supply management solutions.

According to the company, Ariba will pay $150 million for the company, broken down to include an initial payment of $75 million in cash and $50 million in stock, and a holdback payment of $25 million, subject to meeting performance conditions, payable 36 months after the close, in either cash or stock.

In addition, Ariba will pay approximately $10 million to modify and terminate a pre-existing commercial arrangement Quadrem had entered into.

The transaction, which is subject to customary conditions and regulatory approvals, has been approved by both companies' board of directors and is expected to close during the second quarter of Ariba's fiscal year 2011, which ends on March 31.

"In uniting our know-how, solutions and people, Quadrem and Ariba can deliver unparalleled network scale and reach that enables buyers and sellers around the world to improve supply chain performance and tap new business opportunities," said Charles Jackson, CEO of Quadrem, in a statement. "Through the combined entities, companies will have access to a truly global partner who can help them optimize and extend buyer and supplier commerce and ultimately, the results that they deliver."

With approximately 70,000 suppliers in 65 countries and customers including, Alcoa, Anglo American, BHP Billiton, Nestlé, Vale and Rio Tinto, Quadrem has one of the world's largest on-demand supply networks.

Its customers are found across a range of industries, including: natural resources, oil and gas, and manufacturing. The company also operates a supplier identification and verification business that is complementary to Ariba Discovery, which is an online service connecting buyers and suppliers around the world, the companies said.

"The acquisition of Quadrem will enable us to further expand our network volume and reach, accelerate growth, and extend better commerce to more companies in more regions of the globe," said Bob Calderoni, CEO of Ariba. "Quadrem has proven its ability to build and monetize large-scale collaborative commerce programs. We can leverage this experience to create additional value for our customers and bring our proven solutions to Quadrem's existing customer base to enhance the value of their investments."

Ed Silverstein is a TMCnet contributor. To read more of his articles, please visit his columnist page.

Edited by Jaclyn Allard