Colorado Firm Lays Claim to GoldMine
GoldMine Software Corp., the Pacific Palisades software developer, will announce today it has reached a deal to be acquired by a Colorado software company for $83 million in cash and stock, the companies said Sunday.
Bendata Inc. of Colorado Springs, a wholly owned subsidiary of Ixchange Technology Holdings, a public company based in South Africa, will buy all of privately held GoldMine’s outstanding shares, about 10 million. No debt assumption is involved, they said.
If the deal is completed, the combined firm, to be called GoldMine Software, will have $52 million in annual revenue and a total work force of 350. The new company will be based in Colorado Springs, but marketing and public relations will remain headquartered in Pacific Palisades. No layoffs are expected, GoldMine officials said.
GoldMine develops software that helps users keep track of business contacts and customer services and is used by such companies as BankAmerica, Sprint and Lucent Technologies. The combined firm would be the largest mid-market provider of sales, marketing and customer-support systems software.
“We’re going from caterpillar stage to butterfly stage,” said Jon V. Ferrara, 39, GoldMine’s executive vice president, who started the firm 10 years ago with partner Elan Susser, 35, in a Woodland Hills apartment with just $5,000.
“By combining these two companies, we are able to deliver the ‘best of breed’ solution for managing the customer life cycles, specifically customer sales and support,” Ferrara said. “People don’t work in a vacuum; they work as part of a team. Our software helps them do that.”
Industry observers expect the combined company to go public by the end of the year.
As part of the deal, Ferrara and Susser will see their combined 90% stake in the company reduced to less than 20%, the firm said.
“With this merger, we are clearly the customer-relationship management gorilla for small- to mid-sized businesses,” said Vance Brown, president and chief executive of Bendata, one of the largest providers of customer support and help-desk software. About 35% of the firm’s revenue comes from outside the United States, providing GoldMine with the opportunity to expand abroad.
As part of the deal, Brown will be president and CEO of the merged entity, leaving Ferrara to focus on communications and Susser to focus on technology.
“I’m the evangelist, and Elan is the technologist. Entrepreneurs should focus on what we do best,” Ferrara said. “Neither of us enjoy day-to-day managing, and now we can focus on the area we are strongest,” Ferrara said.
Both men have no plans to relocate, he said, and the firm will remain in its current offices across the street from the beach in Pacific Palisades, near Gladstone’s 4 Fish restaurant.
“Elan loves Malibu, and I love Santa Monica. I have an old Spanish house here,” said Ferrara, who, with his wife, is expecting the birth of their second child today.
The deal, expected to close by July, is subject to shareholder and regulatory approval.
