Hyperion Reportedly Eyes Information Builders Buy
Hyperion, based in Santa Clara, Calif., is sitting on a cash stash of more than $400 million, and competes in a market under assault by traditional applications vendors like Microsoft and Oracle, which are both bulking up their business intelligence offerings. The company is scheduled to release tomorrow its fourth quarter and full-year results for 2006, a report that will be closely scrutinized by those trying to divine Hyperion's growth strategy.
"Hyperion faces significant competitive issues with respect to its System 9 solution and may seek to address these issues through an acquisition," JMP Securities analyst Patrick Walravens wrote in a research note, adding that his sources say Hyperion has had serious talks with Information Builders. First Albany analyst Mark Murphy also named Information Builders as a likely Hyperion target, though he added the caveat that it would be an "uncharacteristically large" purchase for Hyperion.
Representatives from Hyperion and Information Builders declined to comment on the acquisition rumors.
A large purchase could be a useful way for Hyperion to increase its bulk and offset stumbles associated with its rollout of System 9, a major technology update Hyperion started shipping in October. The comprehensive overhaul pulls together Hyperion's reporting and analytics technologies, but the big-bang update came with a catch: a controversial "enablement fee" that requires customers interested in moving to System 9 to pay a new licensing fee, on top of their regular maintenance payments. The business intelligence market is one analysts consider ripe for consolidation, as industry Goliaths like Microsoft set their sites on it and entrenched vendors struggle with execution issues. Hyperion rival Cognos is delinquent on its quarterly report filings and facing a U.S. Securities and Exchange Commission review as it sorts through an accounting debacle, while Business Objects recently warned that it fell short of revenue goals in its last quarter after failing to close several large deals.