Ascential To Buy Vality Technology

Ascential Software Vality Technology

Privately held Vality said it had revenue of $21.2 million in 2001. Ascential chairman and CEO Peter Gyenes termed the deal a key strategic fit for the company, which is trying to position itself as a leader in enterprise data integration. Analysts said the move positions the combined company to take on Informatica and other ETL powers. Last November, Ascential bought Torrent Systems, an information asset management specialist, for $46 million.

The goal of data quality management companies is to assure that the base information from many sources that is so key to CRM and supply chain management applications is valid, clean and up to date.

Vality currently has a marketing agreement with Informatica, which will end when this deal closes, according to Vality President and Chairman Mark Atkins.

Gyenes defended the payment of a high multiple for Vality. The combined company can "offer more to customers and widen the differentiation between us and our competitors. In the case of both Torrance and Vality, these are highly strategic acquisitions and we don't see anything out of line with the multiples," Gyenes told analysts in a conference call Tuesday morning.

Vality's Atkins concurred. "From a competitive point of view, this is the most robust combination now of ETL, meta data management and data quality features available in a single offering. Informatica relies on loose marketing relationships with multiple vendors in this space," he said.

The benefit to customers and partners is they can now get all the functionality in a single offering and work with a "single one-stop vendor for product services and support. That will have a significant impact vs. cobbling together multiple offerings from many vendors," Atkins said.

Atkins and 100 of Vality's 115 Boston-based employees are expected to remain with Ascential.

The purchase, which has already passed Hart-Scott-Rodino muster, is expected to close in April. Geynes said he expects the combined company to be profitable by year's end. In its year-ago fourth quarter, Ascential lost $31.3 million, or 12 cents per share.

Ascential was formerly known as Informix Software until last spring when IBM bought the Informix database business for $1 billion, leaving the newly named Ascential with its DataStage data integration offerings and Media360 content management products.