Prior to being acquired by Serena Software in April,
2004, Merant was a $125M publicly traded leader in Software Change
Management (SCM) with 600 employees worldwide. In late 2002 Merant’s
board brought in a new management team with a charter to return
the company to profitability and to ramp revenues. Since that time
the company has achieved six consecutive quarters of increasing
profits and turned to M&A during this period to provide top
line revenue growth.
Because Merant didn’t have an M&A
strategy or process in place, and also didn’t have the management
bandwidth to develop them, they looked outside the company for help.
As a public company with $80M in cash, Merant could have chosen
any strategic advisor they wished. They selected Stratagem as the
company with the right combination of skills, structure and experience
to satisfy their broad set of requirements, which at a high level
Stratagem hit the ground running, putting process
in place while also researching and evaluating complementary market
segments and companies. In addition to market size and growth we
considered many company-specific factors such as product architecture
and integration, operating economies, accounting treatment, competition,
Over the course of eighteen months Stratagem
led a number of key initiatives:
Answering to Merant’s SVP and general
manager, we spoke and met regularly with the Merant executive team
and a designated M&A task force. We also authored the slides
that were presented to Merant’s board to report on our progress.
Without the benefit of a rich stock price or
ability to use meaningful amounts of Merant's cash, Stratagem was
able to close two transactions that notably bolstered Merant's competitive
position and growth prospects. Additional deals were well down the
path before Serena's pre-emptive offer.
The first deal we closed was a high value OEM
agreement that expands Merant’s platform coverage to include
IBM mainframes. As a result of this deal Merant could announce the
industry’s first comprehensive change management solution
that spans both mainframe and distributed environments. Stratagem
also drove the acquisition of a groundbreaking analytics software
company that will provide Merant customers greater insight into
the performance of development teams and projects, while improving
Merant’s value proposition to senior IT management.
At the end of Stratagem’s 18-month engagement,
Merant was acquired by Serena Software for $390 million –
a 34% premium over Merant’s most recent average stock price.
Stratagem's work to crystallize and execute Merant’s expansion
via strategic partnering was validated by Serena’s recognition
of these efforts in a press conference following the deal announcement.