Upland Software has announced the acquisition of Qvidian Corporation for $50 million. This is the largest acquisition in Uplands history and will add $19.5 million annualized revenues to the company. Qvidian provide cloud based RFP and Sales proposal automation software to more than 1,000 companies worldwide.
Jack McDonald, chairman and CEO of Upland Software commented: “We are pleased to welcome Qvidian and their valued customers, users, and partners to Upland. This strategic acquisition further enhances Upland’s Workflow Automation product family with another market-leading cloud offering that delivers intelligent workflows, and improved sales effectiveness and responsiveness through a highly secure and scalable proposal automation solution.”
Strengthening Workflow Automation
Qvidian joins the Upland Workflow Automation portfolio of businesses. These already include AccuRoute, FileBound and Ultriva. However, it will be interesting to see how the software is developed going forward to integrate with its PSA solution, Tenrox. The company has some significant professional services names within its customer base including Accenture, Grant Thornton and Deloitte.
Qvidian also operates in other sectors too though including banking, financial services, healthcare, technology and telecommunications. The position within the Workflow Automation therefore makes sense.
Sean Nathaniel, CTO and SVP of Workflow Automation Solutions for Upland Software commented: “Upland is committed to delivering 100% customer success and helping organizations reach their goals by providing outstanding value and support through our UplandOne platform. We look forward to ensuring the ongoing success of Qvidian’s global customer-base by helping them automate their proposals and RFP responses, improve collaboration and productivity, reduce RFP response times, and increase revenue.”
Upland is paying $50 million in total for Qvidian. $30 million will be paid cash in hand and the remaining $20 million from Upland’s the credit facility. This is the largest deal in the company’s history and will significant increase their revenues. Qvidian was founded in 1980 by Tom Sant and received its last funding round in 2010, nearly $28 million (Source: Crunchbase).
The deal significantly changes the outlook for Upland for the remaining quarters of the year. It expects that the addition will bring an annualised increase in EBITDA of around $8 million. It values Qvidian at around 6x EBITDA. In some ways this seems at the low end of a valuation for the company. It is interesting that there are no quotes by Qvidian board members within either the release or on their site. It will be interesting to hear the reasons for the sale in due course.
Upland share price (NASDAQ:UPLD) jumped a dollar on the news, but has since settled back to $21.20 on close, up from the previous day closing price of $20.93.
What does this mean
For Upland this significantly improves their Workflow Automation portfolio. It also brings several significant customers to them. They will hope that they can leverage those relationships and increase sales for some of their other solutions.
For Qvidian it is a more interesting decision. One wonders whether the owners were looking to sell and found the best offer came from Upland. This is not an insignificant acquisition and while there may be some cost savings Upland are likely to keep the brand and let the company flourish. Customers will want to see what the future holds once the dust settles.