E2Open made an unsolicited offer for Amber Road (AMBR) on February 12, but it escaped my notice until this week (h/t Dan Juliano). E2Open’s offer seems to have escaped a lot of people’s notice. Everyone I have asked about it was surprised as well!
The E2Open Offer
E2Open offered $10.50 per share (all cash) or over $300 Million for AMBR. This represented a 52% premium over AMBR’s immediately prior closing price and 41% over AMBR’s prior 30 days trading range. E2Open also made it clear that because it is private-equity backed, the deal could be consummated. Not a shabby offer. (BTW, the offer was similar, in terms of premium and total consideration, to the deal Insight Ventures made to take E2Open private a few years ago.)
The company also provided a compelling strategic rationale for the deal. After all, adding trade management to E2Open’s supply chain offering is like adding peanut butter and jelly. As E2Open said:
A combination of E2open and Amber Road would benefit the businesses’ customers in the following ways:
- Provides significant roadmap acceleration for both companies. The unified product portfolio will immediately deliver value to all existing customers of both companies
- Extends E2open’s unique platform… to include the important considerations of tariffs, regulations and total landed cost across the entire supply chain
- Incorporates global sourcing and trade management decisions into planning and execution across demand, supply, and distribution
- Substantially increases scale and resources and provide customers a broader portfolio of connected and integrated solutions
It all seemed to make sense.
The Amber Road Response
The Amber Road board was not having any of it. AMBR rejected the unsolicited bid, which E2Open apparently had previously privately discussed with AMBR. AMBR said:
While we welcome constructive input from all parties that share this goal, the unsolicited offer advanced by E2Open is not in the best interests of the Company and its stockholders. We continue to firmly believe that executing our existing strategic plan is the best means of maximizing value for our stockholders and satisfaction for our customers over the long-term.”
I’m no M&A expert, but AMBR’s response usually translates to: “we hope we get another offer and start a bidding war.” AMBR’s stock price is now $9.32, well below E2Opening’s bid. (See what I did there?!). So the market seems far from certain a deal is going to through.
Global Direct Materials Supply Chain Networks
The market for global cloud networks with functionality suitable for direct materials is heating up. E2Open’s intention to buy AMBR brought me back to their website for the first time in years. And it is clear how much their positioning has changed, with respect to commerce and cross-industry appeal:
E2Open bills itself as the world’s largest direct business network–basically the direct materials equivalent of the SAP Ariba Network.
SAP Ariba would beg to differ. SAP Ariba has recently been touting its solutions for direct spend–moving beyond its indirect spend heritage. Not to be outdone, Infor acquired GTNexus a while back and now promotes the GTNexus Commerce Network. And, in the background, you have the former GXS which is now the OpenText Business Network and Sterling Commerce. The two EDI giants that are still relevant, if not entirely cloud-based, nor as app-friendly.
The battle is on.