New MW Header

December 8, 2011
martinwolf transaction analysis
IBM to acquire DemandTec, Inc. (DMAN) for $440M 

Financial Overview

  • Transaction Value: $440M
  • Transaction Structure: Cash
  • EV/Revenue: 4.25X
  • EV/EBITDA: -44.7X


martinwolf Analysis

  • IBM has signed a definitive agreement to acquire DemandTec, Inc (DMAN), which provides cloud-based customer analytics software that allows businesses to make decisions to increase revenue and profitability, for $13.20/share, representing a premium of 57% above Wednesday's close of $8.43/share.
  • IBM is a recognized market leader in this field and DMAN will extend this leadership by enabling companies to use cloud computing to gain insights about customer merchandising and pricing preferences to market, sell and deliver the right product at the right price.
  • This represents the first major acquisition for IBM's Smarter Commerce initiative, which it has launched to capture an estimated $20B software market in the space, and will allow IBM to enhance its Smarter Commerce initiative through cross-selling with major retailers as well as realize cost synergies from DMAN, which has been unprofitable.
  • DemandTec also expands IBM's Software-as-a-Service (SaaS) strategy by adding additional, subscription-based offerings to IBM's SaaS solutions portfolio.
  • The 57% premium IBM is paying highlights the shift from on-premise software to the cloud; it also follows Oracle's acquisition of RightNow Technologies at a 20% premium and SAP's acquisition of SuccessFactors at a 52% premium.
  • martinwolf expects the major software players to continue to make strategic acquisitions as the race to the cloud continues and SaaS valuations remain strong. This acquisition is also consistent with the increased valuations of SaaS-based businesses that can be found in the martinwolf MW Index here.


Please click here to read the press release.  


martinwolf was not the adviser of this transaction. To learn more about this transaction or our firm, contact Yousif Abudra at  or (925) 215-2760.   

About martinwolf    


Based in Silicon Valley, martinwolf is a leading middle market M&A Advisory focused on companies with services-based business models. Since 1997, our team has completed more than 100 transactions in six countries. We are a five-year member of the Merrill Lynch PS Referral Network, and were selected as ICICI Bank's (India's leading private bank) exclusive strategic partner for acquiring U.S. IT companies. martinwolf is a member of FINRA and SIPC. For more information, visit


December 1, 2011

Softchoice Corporation (TSX: SO) announced it has it has fulfilled its regulatory requirements under the Competition Act and has now completed the acquisition of substantially all of the assets of UNIS LUMIN, one of Canada's most highly regarded Cisco networking and managed services companies. Softchoice was represented by martinwolf | M&A Advisors. The acquisition strengthens Softchoice's professional services capabilities while providing the technology foundation to support the Company's future cloud offerings.

Please click here to view the announcement.   


September 30, 2011

SPS, a leading Unified Communications Provider, announced that Court Square Partners has made an investment in the company. martinwolf | M&A Advisors represented SPS in this transaction. SPS is a premier unified communication services integrator, ranked 131 on the 2011 VAR 500 list with 2010 sales of $143 million. Court Square is a $4B+ New York-based PE Group, with more than 150 lifetime investments.  

Please click here to view the announcement. 


September 20, 2011  

Accel-KKR, a technology-focused private equity investment firm, announced that it had taken a majority stake in Infinisource. Infinisource is a leading benefits administration technology and services company. martinwolf | M&A Advisors represented the seller in this transaction.  

Please click here to

Quick Links 




Quote of the Day


"In business, the competition will bite you if you keep running; if you stand still, they will swallow you."


 - William Knudsen              



See the MW Index featured in GigaOm here.