In a merger that will add more deep technology experience to its ranks, information technology research firm Gartner
is buying tech research firm META Group
for $162 million in cash.
The Stamford, Conn.-based companies made the announcement Monday. Gartner said it would use cash on hand to pay the $10 per share purchase price, plus borrowings from an existing line of credit. The
deal should close in the second quarter of 2005, provided regulators and META stockholders approve it.
META Group is known for offering deep technology expertise to IT vendors looking for tools and processes to benchmark, measure, track, and improve their brand value and offerings.
The firm’s practices and offerings include customer value analyses, IT vendor portfolio management strategies, market segmentation and positioning strategies, pricing and packaging approaches, channel and alliance strategies and competitive differentiation.
Gartner’s research encompasses a wider swath of services for business and IT customers, including consulting and research on key Information Technology verticals such as Government, Healthcare, Higher Education, IT Management, IT Services and Outsourcing, Knowledge Support, Mobile and Wireless, Open-Source Software, Security and Privacy, Semiconductors, Servers and Storage, and Web Services.
The deal signals more consolidation among technology research firms, many of which faced a shrinking sector during the technology recession that followed the selloff of dot-com stocks in 2001. As the industry recovered, the sector got smaller. In January of 2003, Forrester Research purchased Giga Information Group for $60 million in cash.
In May of this year, Reuters sold off its interest in research firm Yankee Group to private equity firm Monitor Clipper Partners (MCP) for an undisclosed sum.
Gartner has 76 offices worldwide and banked $858 million in revenue last year. META counts 52 locations and posted $122 million in revenue in 2003.
The company said it would provide additional information on the integration, as well as 2005 guidance during its 2004 year-end earnings call scheduled for February 3, 2005.
“This transaction is an exciting opportunity that will give us increased depth in key sectors, geographies and markets, and
an increased ability to seize revenue opportunities with the addition of META Group’s well-trained, successful sales force,”
Gene Hall, Gartner’s CEO, said in a statement.
Gayl Doster, a META Group director, said in a statement that both META Group and Gartner clients will have access to greater depth and breadth of expertise to “help them meet their business goals as efficiently and effectively as possible.”
Spokespeople for Gartner and META were not immediately available for comment.
The company expects a relatively smooth integration since META sales staffers are already well-versed in the field. It will not have a significant impact on Gartner’s 2005 operating results (besides charges related to the integration), but will be
“meaningfully accretive thereafter,” Gartner said.
In addition to a 54 percent premium over its Thursday closing price (markets were closed for the Christmas holiday on Friday) of $6.48 per share, the move will plug it into a large global organization.