Intuit Inc., the vendor of the popular Quicken personal finance software, has entered the distribution marketplace with the acquisition of Eclipse, a provider of business management software for distributors.
Intuit, Mountain View, Calif., said the acquisition of Eclipse would help it to become a key provider in the wholesale distribution software segment. According to the company, sales of distribution software for distributors total $300 million annually and offer significant opportunity for future growth. In the electrical market, Eclipse competes with TradePower, Blue Bell, Pa.; Prophet 21 Inc., Yardley, Pa.; NxTrend, Colorado Springs, Colo.; Software Solutions, Duluth, Ga., and several smaller players.
“This acquisition fits all three elements of our strategy — serving larger and more complex businesses, providing solutions beyond accounting and providing industry-specific solutions,” said Steve Bennett, Intuit's president and chief executive officer. “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.”
Under the terms of the agreement, Intuit would acquire substantially all of Eclipse's assets for approximately $85 million in cash. Intuit expects Eclipse to contribute between $40 million and $50 million in revenue in fiscal year 2003.
Intuit expects to retain virtually all of Shelton, Conn.-based Eclipse's 220 employees. Eclipse also has offices in Boulder, Colo., and West Yarmouth, Mass.
Founded in 1991, privately held Eclipse provides business-management software solutions to wholesale distributors' market segments that include plumbing, HVAC, electrical, business materials, industrial, janitorial and floor coverings. The company's flagship product, the Eclipse Distribution Management System, is a real-time enterprise resource planning system that enables distributors to automate their business processes, penetrate new segments and better serve their customers.
Intuit has annual revenue of more than $1.3 billion and reaches 25 million customers with nearly 6,000 employees in 13 states and four countries.
Eclipse is the fifth acquisition Intuit has made or announced in fiscal 2002. Other acquisitions include OMware, American Fundware and CBS Payroll; in addition Intuit announced earlier its intent to acquire Management Reports Inc.
Intuit plans to operate Eclipse as a separate business unit led by Michael London, an Eclipse founder and the company's president and chief executive officer. Intuit will offer Eclipse's current products and services using both the Intuit and Eclipse brands. London will become a vice president at Intuit, and the company's other five founders will be asked to stay with the business. Eclipse will remain in Shelton.
There's been a lot of mergers and acquisitions in the distribution software business in recent years. BuildNet Inc., Research Triangle Park, N.C., acquired NxTrend Technologies Inc., Colorado Springs, Colo., a distribution software vendor, in the spring of 2000. After BuildNet went bankrupt in 2001, NxTrend's former owners regained control of the company. Trade Service Systems split off from its parent, Trade Service Corp., when Trade Service Corp. was acquired by i2 in early 2001. Trade Service Systems is now part of TradePower, along with Estimation Inc., Linthicum, Md., one of the largest providers of estimating software for electrical contractors. And just this week, NxTrend acquired CorpDNA, a provider of Customer Relationship Management (CRM) solutions.