CDC Software to buy SaaS firm gomembers

01 Dec '09

4 min read

CDC Software Corporation a global provider of enterprise software applications and services, announced it has completed a definitive agreement to acquire gomembers, Inc., a leading provider of software as a service and on-premise solutions for the Not-For-Profit and Non-Governmental Organizations (NGO) market.The acquisition is expected to close early this week and remains subject to standard closing conditions.

Chicago-based gomembers is the second of the two previously announced SaaS companies CDC Software plans to acquire as part of its SaaS roll-up strategy to complement its on-premise solutions in key verticals that include NFP/NGO, retail, financial services, consumer electronics, apparel, consumer packaged goods (CPG), travel/leisure/loyalty and sports/entertainment. As part of that strategy, CDC Software reached a definitive agreement last week with eCommerce provider Truition. The acquisitions of gomembers, and Truition, are expected to advance the company's goal to offer customers multiple deployment options, such as on demand, on-premise and hybrid, a blend of both on-premise and on demand solutions, that best fit their business requirements.

Founded in 1996, by Paul Plaia, gomembers delivers enterprise solutions to some of the most well-respected NFP's in North America, including: The Armed Forces Communications and Electronics Association International, Water Research Foundation, University of Iowa and The United States Conference of Catholic Bishops, to name a few. The company has more than 150 customers, utilizing more than 1,500 seats, that include trade groups, professional societies, medical-based not-for-profit organizations, associations, hospitals, colleges and universities, certification bodies, fundraising groups, individual member-based groups, NFP management companies and donor-based organizations. Its customers can automate constituent communications and development, member services, constituent-to-constituent collaboration, ERP, CRM, financial management, transaction processing and e-commerce all from a single platform.

CDC Software will be targeting what is believed to be a largely underpenetrated and fragmented market space that is estimated to include approximately 1.5 million registered NFPs in North America alone, according to market research. The company also believes that this sector is ripe for consolidation.

"We are excited to be in a position to finalize our acquisition of gomembers, which we anticipate will serve as the launch pad for other acquisitions in the NFP/NGO market," said Bruce Cameron, president of CDC Software. "SaaS solutions are appealing for a variety of organizations, especially the NFP/NGO market, as a low-cost way for businesses to realize the benefits of licensed software which otherwise might be cost prohibitive for them. "We believe we can become a dominant SaaS player in this underpenetrated space and this acquisition serves as an integral part of the strategy. From a financial perspective, the company is profitable with a strong management team and solid recurring revenue as they have successfully transitioned from a traditional license model to a managed service model. In addition, we anticipate numerous cross-sell opportunities with Pivotal CRM and our other Front Office solutions. As we have stated previously, this acquisition is expected to be earnings accretive immediately and fits within our strict valuation criteria."

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