Xchanging plc Acquires MarketMaker4
Xchanging plc ("Xchanging"), the business process, procurement and technology services provider, today announces that its subsidiary, Xchanging Inc. has acquired 100% of the share capital of SBB Services Inc., trading as MarketMaker4 ("MM4"), an e-Sourcing Software-as-a-Service provider based in the USA.
MM4 adds a strong technology capability, with extensive experience in e-Sourcing, online auctions, market intelligence, strategic sourcing, and supply chain consulting, to complement Xchanging's existing Procurement business. The acquisition will enable Xchanging to engage directly in the e-Sourcing segment of the procurement market. In addition, MM4's strong, referenceable customer base in the USA and other countries provides Xchanging with opportunities for its portfolio of products and services.
The acquisition contributes to Xchanging's technology-enablement strategy and expands the breadth of procurement services Xchanging offers. Xchanging is ranked No. 3 in the procurement outsourcing market place by Everest*. The acquisition will help to build the company's presence in the large US market, further consolidating this position.
Xchanging will pay a potential total consideration of up to US$22 million, paid as an initial consideration of US$11 million, in cash, on contract signing, with further payments totalling up to US$11 million payable between 2014 and 2016, contingent upon MM4 achieving defined milestone performance criteria. The transaction adds a higher margin business to Xchanging's Procurement Services and is value enhancing both for the Procurement Services business as well as for Xchanging overall. The three founding shareholding directors of MM4 will remain with the business.
Ken Lever, Xchanging Chief Executive, commented: "I am very pleased to announce the acquisition of MM4. This is the kind of bolt-on technology acquisition that fits perfectly with our strategy, bringing higher value and differentiation to our offerings. Following a number of recent contract wins in the US market, this acquisition also helps us further build our position in this important market."
Chirag Shah, MM4 Co-Founder and Chairman, said:" In the space of only a few years, MM4 has become well established in the corporate procurement market, particularly in the US. Being part of Xchanging, who first came to us as a customer, will provide the opportunity and the resources to accelerate our growth and allow MM4 to play a leadership role in the Spend Management sector."