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Intuit Inc., Mountain View, CA, has signed a definitive agreement to acquire Eclipse, Inc., Shelton, CT, a provider of business management software solutions for wholesale durable goods distributors, for $85 million in cash. Intuit expects Eclipse to contribute $40-50 million in revenue in the year ending July 2003. Intuit's flagship products include Quicken, QuickBooks and TurboTax. The acquisition is part of Intuit's strategy to acquire strong vertical niche software companies to provide upgrade paths for its small-business customers.
The company estimates the wholesale distribution software market segment has annual sales today of $300 million, with significant opportunity for growth. Intuit currently has more than 200,000 QuickBooks customers who identify themselves as involved in wholesale distribution.
Intuit currently plans to operate Eclipse as a separate business unit led by current President and CEO Michael London, and will offer Eclipse's current products and services using both the Intuit and Eclipse brands. London will become a vice president at Intuit. Virtually all of Eclipse's 220 employees will be asked to stay with the business, including the company's other five founders.
Eclipse has an installed base of more than 450 customers, including about 200 plumbing-heating-piping-cooling (PHCP), 100 electrical, and 80 HVAC companies, with the remainder in assorted industrial supply, building supply, paper and janitorial, and other durable goods wholesale channels. The vast majority of Eclipse customers have 250 or fewer employees.
For current Eclipse customers, the acquisition provides more development resources and focus on each of its current vertical markets, according to a company spokesman. Eclipse will also be able to broaden its offerings across the spectrum of company size, and offer more customized growth platforms.
Eclipse, a closely-held company, was not seeking a buyer, but was approached by Intuit as a strategic fit. Eclipse has 25 workers at its corporate office in Shelton, CT; about 65 in West Yarmouth, MA; and 110 employees in Boulder, CO.
Intuit, with annual revenue of $1.3 billion, has $1.6 billion in cash and no debt. It is ramping up an aggressive acquisition strategy in select vertical markets to provide upgrade paths for its small-business customers. Eclipse is Intuit's fourth acquisition this year.
'The acquisition of Eclipse is another example of Intuit executing its ﾑRight for My Business' small business strategy and entering a new segment,' said Steve Bennett, Intuit's president and CEO. 'This acquisition fits all three elements of our strategy ' serving larger and more complex businesses, providing solutions beyond accounting and providing industry-specific solutions.
'Wholesale distribution is an intensely competitive business with very tight margins. Eclipse's solutions enable distributors to maximize productivity, revenue and profitability by managing every critical aspect of their business - from order processing and inventory control to accounting, purchasing and customer service.
'A new Intuit-Eclipse brand has incredible opportunity,' Bennett said. 'The vast majority of distributors still rely on inflexible, legacy systems and are great candidates for technology solutions that make their businesses more competitive and profitable. By combining Intuit's strong brand and resources with Eclipse's highly talented management team and superior products, we believe we can further penetrate this large untapped opportunity and accelerate Eclipse's growth.'
Bennett said Intuit will also explore opportunities to provide the more than 200,000 QuickBooks customers involved in wholesale distribution with more robust solutions.
Bennett noted that revenue from its November 2001 acquisition of OMware, a provider of business management solutions for construction companies, has grown significantly since the acquisition closed. In addition to OMware, Intuit has acquired American Fundware, which provides business management software solutions to public sector organizations, and has announced plans to acquire Management Reports, Inc., which provides business management software solutions for commercial and residential property managers. In early June, Intuit also acquired CBS Payroll, which provides a full-service outsourced payroll solution.