IONA Acquires C24 - FAQs
The Deal
Q: Why is IONA acquiring C24?
A: C24 adds key data services capabilities/functionality that helps IONA fill out its product roadmap for the Artix family of distributed SOA infrastructure solutions and better meet customers' evolving SOA requirements. Their technology is complementary to Artix and is currently being sold (based on an existing reseller agreement) to our prospects. In short, this acquisition will enable IONA to immediately address the needs of our customers and partners around data transformation.
C24 also provides strong domain expertise in the financial services sector. While C24's technology is inherently applicable to any market - and solves a real need in all of our four market areas of focus - the C24 senior management team has strong roots, numerous contacts, excellent reputations and industry relationships and overall domain expertise in the financial services industry. Specifically, several members of the team currently participate on and are considered key influencers to some of the most critical standards organizations in the financial service realm.
In short, the key assets as a result of this acquisition are: technology, existing customers, and domain expertise in financial services and data services expertise among the technical team.
Q: What are you paying for C24?
A: Terms were not disclosed.
Q: What is covered under the terms of the acquisition?
A: We are acquiring substantially all of the assets of C24, including technology, intellectual property and active customers. Additionally, all 12 C24 employees are becoming IONA employees as a result of the acquisition.
Q: When will you complete the acquisition?
A: The transaction closed on March 5, 2007.
Q: When will this acquisition be accretive?
A: Our stated acquisition strategy has consistently articulated that in addition to providing a strategic fit, any acquisition must also provide a cultural fit and from a financial viewpoint, be accretive within a year. This acquisition is is expected to be within those guidelines.
The Company
Q: Who is C24?
A: C24 is a software product company that specializes in financial services message standards. C24 integration technology includes Support Pack bundles of services and maintained data models for a range of specialized highly targeted and business-specific usage scenarios such as SWIFT FIN, ISO 7775 and 15022, ISO 20022, CREST, OMGEO, FpML, TRAX, and FIX. C24 clients include a blue-chip installed base in the US, UK and Europe covering central banks, exchanges, clearing houses and major investment banking firms as well as independent software vendors.
Q: How is C24 different than other companies in this sector?
A: Like IONA's Artix, C24's technology is deployed in a distributed manner, eliminating the requirement for a centralized server. Most other data services vendors rely on a centralized architecture. Further, C24 technology takes a data focused approach to integration. It has pre-built and supported industry specific data services libraries (Support Packs), the ability to model ANY data, to apply semantic validation rules to the data, to specialize, version control and transform to and from any of the industry standards or user specific formats. And all of this is then deployed into the Artix run-time environment, representing a very powerful, and compelling, combination.
Q: Is C24's technology limited to a particular industry?
A: C24's management team are recognized specialists in financial services messaging standards and the team has extensive experience in this sector the technology. However, C24's technology has horizontal applications and can be effectively used across vertical market segments.
Q: Is C24 privately held? What is the revenue and profitability profile of C24?
A: C24 is a privately held company and was organically funded. We plan that as part of IONA, this acquisition will meet our stated goal of being accretive within a year.
Q: How will IONA bring C24's products to market?
A: C24's products, which include developer kits, a runtime environment and pre-built standards-based message libraries will become a part of the Artix family of distributed SOA infrastructure solutions. We will continue to sell these products through our established direct sales and partner channels.
Operations
Q: Will IONA keep the C24 name or will the company and products be renamed within IONA?
A: All C24-associated brands will immediately change to the IONA or - in the case of their products - the Artix brand. C24 employees will refer to themselves as IONA employees.
Q: What is the revenue model for C24?
A: C24 is a software product company and as such revenue is derived from software licenses, maintenance and support contracts and professional services engagements
Q: Who and where are C24's customers?
A: Substantially all of C24's customers are Global 2000 financial services organizations.
Q: How do the industry and its customers perceive C24?
A: C24 has an excellent reputation within the financial services industry and the standards bodies and industry analysts associate with it.
Q: How much will this add to your quarterly expense rate?
A: With this acquisition we are adding 12 people and the associated overhead/office and other costs, so we are not adding significantly to expenses. When we report our first quarter earnings results towards the end of April, our guidance for the second quarter will include this as part of our total expense run rate.
Q: How much will this add to your quarterly revenue run rate?
A: This is primarily a technology acquisition. The initial effect on our revenue run rate is not significant at this point. We are extremely excited about this technology and the growth opportunities it provides to our distributed SOA offerings and consequently plan for this acquisition to be accretive within a year.
Q: Will C24 continue for any length of time as an independent company marketing their own offerings?
A: Effectively immediately C24 ceases to exist as an independent company and all product development, sales, marketing, administrative and financial responsibilities move to IONA.
Q: What are the revenue growth expectations for this business under IONA?
A: The C24 business and employees will immediately be folded into IONA and as such, will not be viewed as a separate business going forward. We are extremely excited about this technology and the growth opportunities it provides to our distributed SOA offerings and consequently plan for this acquisition to be accretive within a year.
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