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Pegasystems Buys Chordiant

By Brendan B. Read
Senior Contributing Editor

In a move that marries business process management (BPM) with customer relationship management (CRM), BPM supplier Pegasystems has acquired CRM firm Chordiant Software in an all-cash deal for approximately $161.5 million or $5/share.

Chordiant brings to Pegasystems (News - Alert) its Customer Experience (Cx) inbound and outbound CRM, predictive analytics, adaptive decisioning, cross-sell/upsell, retention and process monitoring software and services.

Chordiant's (News - Alert) newest product, announced in early April, just before stepping to the altar with Pegasystems, is Chordiant Cx Outbound. It offers businesses the opportunity to use a common set of customer strategies to systematically determine the best next action for a customer regardless of the direction of the communication and the channel. The new outbound product combined with the other capabilities, provides self-learning, so companies can have a continually adapting, holistic and complete picture of each and every customer communication, resulting in, it says, better inbound and outbound customer interactions.

BPM, says Pegasystems, "capture[s] and automate[s] an organization's policies and procedures. More importantly [it is] an approach to organizational understanding and change, a methodology for assessing and improving business results, and software for managing and automating human and application interactions to get the most out of business processes." Pegasystem's SmartBPM technology makes, the company says "enterprise applications easy to build and change by directly capturing business objectives and eliminating manual programming. SmartBPM unifies business rules and processes into composite applications that leverage existing systems."

Pegasystems had won Chordiant's hand after the latter firm had spurned an offer in January 2010 from CDC Software (News - Alert) Corporation for cash and CDC stock equivalent to $3.46 per share. Chordiant said the offer "significantly undervalues Chordiant and is not in the best interests of Chordiant's shareholders.

The combined new company's expanded global customer base, including many large global organizations, can now take advantage of these complementary solutions. Chordiant clients will be able to incorporate Pegasystems intent-driven process automation to enhance customer experience in their existing foundation and marketing solutions. Pegasystems' clients can take advantage of Chordiant's predictive decision management solutions, extensive CRM assets, and expertise in customer experience.

Many of the leading global systems integrators, who are part of Pegasystems' growing alliance program, have already built practices around Chordiant software. The combination of the two companies would enable an expanded partner network to enhance their practices and realize incremental growth.

"This combination creates a broader portfolio which will offer an expanded client base new capabilities to meet next-generation CRM needs," said Alan Trefler (News - Alert), Founder and CEO of Pegasystems. "We are excited to add Chordiant's technology and domain expertise to bolster our previously announced investment plans in BPM and CRM.

"We are pleased with the successful completion of the tender offer and look forward to quickly closing this important transaction. The broader portfolio of the combined organization will deliver more powerful solutions that today's businesses are looking for to enhance customer experience and drive profitable growth. Pegasystems is committed to continuing our history of innovation and business transformation to better serve the needs of the world's leading organizations."

"We are excited to bring Pegasystems' industry-leading Build for Change technology to help our clients further optimize customer experience," said Steven Springsteel, chairman, president and CEO of Chordiant Software. "We expect that our customer base will welcome this news, and can look forward to the increased innovation that Pegasystems is known for, along with the many other benefits resulting from the mutual strengths and combined scale of our companies."

Pegasystems/Chordiant customers and firms interested in their solutions will have an opportunity next week to find out more themselves at the PegaWORLD 2010 conference April 26-27, 2010 in Philadelphia, Pa. Chordiant is a platinum-level sponsor and featured partner and will participate in the conference's Technology Pavilion. The announcement was made April 7, prior to the acquisition being consummated.

This sponsorship enables Chordiant customers to participate in the PegaWORLD 2010 conference. At the Chordiant booth, breakout sessions and roundtable event, Chordiant customers will get a first look and see live demonstrations on how both companies' products will work together after the transaction closes. Attendees will also be able to meet key executives, provide input into future product roadmaps and share best practices insights with other participants.

PegaWORLD provides an opportunity to see how leading companies are using Pegasystems' technology to address innovation in CRM, increase business agility, and drive new business. Attendees will also learn directly from industry thought leaders, network with peers, and gather practical knowledge that can be applied directly to their organizations. The PegaWORLD 2010 agenda features keynote presentations and panel participation from organizations such as Medco, ING, Zurich/Farmers, Accenture, Capgemini, and Forrester (News - Alert), as well as Michael Maoz, lead analyst for CRM at Gartner, who is hosting a panel with TD, Kaiser Permanente, and Medco on optimizing customer experience.

"We look forward to welcoming Chordiant customers to join the Pegasystems community," said Trefler. "We feel that this is an exciting time for both organizations. PegaWORLD is an excellent opportunity for Chordiant customers to join the Pegasystems community, and learn more about the future of their solutions."

"We believe that this is the perfect time for Chordiant customers to learn more about the benefits that our combined organizations will provide, as well as join a vibrant community of their peers," added Springsteel. "This event will allow our customers to see the strong focus that Pegasystems has on its clients, and enable them to experience this commitment firsthand."