Blackbaud-Convio Deal Expected to Close FridayBrendan Kearney / Post and Courier
It took longer than anticipated, but Blackbaud expects to complete its purchase of Texas competitor Convio today, the Daniel Island software company's chief executive officer said Thursday. Months of regulatory scrutiny finally ended last week, and now the two public companies can move from preliminary integration plans to the nuts and bolts of becoming one.
"We've got a lot of work ahead of us, but this is truly an exciting time" for everyone involved, Blackbaud CEO Marc Chardon said. Chardon conceded there had been some doubt the $275 million deal, which he announced in January and predicted would be done by the end of March, would ever close.
"The longer it took and the more steps there are ... you have to consider the possibility that it might not," Chardon said.
"Both organizations, I'm quite sure, felt some pressure in terms of the ability to keep the booking momentum and the pipeline full," he said.Chardon offered the latest on Blackbaud's biggest acquisition in its 30-year history Thursday during a conference call to discuss the company's first-quarter earnings.
Blackbaud reported total revenue of $94.7 million for the quarter, up 9 percent from the same period last year. Chardon highlighted growth in subscription, as opposed to perpetual license, sales; in international markets; and in customer relationship management systems for higher-education institutions. But net income, $2.8 million, and earnings per share, $.06, were down from the first three months of 2011.
Tony Boor, the company's chief financial officer since late last year, attributed that drop to increased investment in research and development and "back-office processes" as well as to major hiring in sales and marketing.
"From a big-picture perspective, we knew the first quarter was going to be a period of investment, and it was," Boor said. But the rest of the year should compensate, he said, to achieve previously announced earnings goals.
Blackbaud spokeswoman Melanie Mathos wouldn't say how many people were hired as part of the first-quarter boom but that the company's total head count stands at 2,400, with roughly 1,100 working out of the local headquarters building. Convio, which counts more than half the top 50 U.S. charities among its more than 1,500 customers, has about 450 employees. Mathos said there were no plans for layoffs.
Chardon said the two companies are complementary –- Blackbaud specializing in CRM, Convio specializing in online fundraising –- and that the combined operation, "one of the largest software-as-a-service vendors in the world," should be able to take advantage of the huge market opportunity before them.
"$500 million in revenue is well within our sights, and we significantly improved our position to ultimately scale Blackbaud to our longer-term goal of $1 billion or greater in annual revenue," Chardon said.