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Technology Stocks : FirstWave Technologies (FSTW) -- Ignore unavailable to you. Want to Upgrade?

To: TEDennis who wrote (8155)	3/4/2003 2:27:07 PM
From: TEDennis	Read Replies (1) \| Respond to of 9677

Firstwave Acquires Connect-Care, Outlines Growth Strategy By Kimberly Hill CRMDaily.com March 4, 2003 Mid-market CRM software maker Firstwave has announced the acquisition of specialty CRM vendor Connect-Care, which focuses on the software segment of the high-technology vertical market. According to the companies, Connect-Care will merge with a subsidiary of Firstwave. Firstwave CEO Richard Brock told CRMDaily.com that the acquisition fits into his company's growth plans. It will add an important mid-market vertical to Firstwave's portfolio, which is currently strong in government and growing stronger in sports and professional services, he said. Resellers Abound Brock stressed that Connect-Care's standing among software companies will give Firstwave access to a large group of potential business partners -- in effect, delivering an established OEM (original equipment manufacturer) network to its doorstep. "Every single one of them could become a reseller of our product," he said. Brock expects that Firstwave's reputation for ease of implementation will establish it strongly in the software segment. "Software companies are smart buyers," he said. "They're not afraid to buy CRM software from a smaller company. They know enough to understand the difference between technology and marketing." Upgrade Path The two companies' software is functionally similar. However, Brock predicted that Firstwave's .NET architecture will encourage customers to upgrade to Firstwave over time. "Further," he added, "and perhaps most importantly, many of their customers may take advantage of private-labeling the Firstwave CORE Integrated Development Environment to develop their own vertical software packages. We could not add a better customer base than software houses." Smart Moves Brock is successfully shepherding Firstwave -- an early CRM player -- back into the thick of the market, says Aberdeen Group vice president Denis Pombriant. "It appears that since Brock came back into active control of day-to-day operations," he told CRMDaily, "the company is again beginning to surge." Pombriant observed that the mid-market is the place to be in CRM these days and speculated that "Brock may be trying to catch that wave" in his acquisition of a company whose customers are smaller firms. In addition, he noted that software firms -- although noted as early adopters of technology of all types -- may have avoided the CRM field during its early years simply because the suites were so expensive and cumbersome. Software companies, therefore, may be good prospects for a viable mid-market application suite. Terms of the Deal According to the companies, Firstwave will deliver 200,000 shares of common stock to the shareholders of Connect-Care under the terms of the merger agreement, as well as an additional potential earn-out payment of US$300,000 in cash payable in 2004 if certain revenue goals are attained. Brock said the acquisition will be accretive to earnings and will increase Firstwave's first-quarter revenues. Jeffrey Longoria, president and co-founder of Connect-Care, will continue on as vice president of sales for Firstwave. Joe Longoria will joint Firstwave as vice president of professional services. crmdaily.com