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Chinadotcom completes Pivotal acquisition

Chinadotcom unit CDC Software has completed its acquisition of midmarket CRM supplier Pivotal.

Pivotal chief executive officer Bo Manning said his company is back in growth mode now that its financial pressures are eased. Pivotal had been hit hard by the slowdown in enterprise software buying. In its most recent financial year ending 30 June, it posted revenue down 19% to $56.1m, and a net loss of $27.6m.

Chinadotcom paid $56.6m for Pivotal, issuing to Pivotal stockholders Chinadotcom shares valued at $20.7m and paying the rest of the purchase price in cash. The hong Kong company will use Pivotal's sales, marketing and customer service applications as components in the broader enterprise resource planning software suite it is constructing through acquisitions.

Manning said he will remain with the company as head of Pivotal, which will operate as a CDC Software subsidiary from its Vancouver headquarters.

In the past month, as Pivotal started planning its integration with CDC Software, it began hiring to fill open development and sales positions. The company hopes to fill nearly 100 research and technical support positions, half in Vancouver and half in India.

With the backing of its new parent, Pivotal has also doubled its marketing budget and restarted its acquisitions programme.

"We're in fairly deep discussions with two companies, in CRM and related markets," Manning said.

Chinadotcom's focus is on the Asia-Pacific market, but the company has no plans to scale back Pivotal's presence in North America.

"The CDC strategy is to build a large global enterprise software company and, concurrent with that, to take all the software that they're building and use their Asian distribution to go after those markets, to go after China," Manning added.

Pivotal plans two incremental product updates for this year and a major release in the first half of 2005. Forthcoming developments include improved analytics and business process management capabilities, and increased integration with Microsoft's desktop applications.

Stacy Cowley writes for IDG News Service


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