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Hyperion to Snap Up Brio Software for $142M

The business software space is still shrinking.

For the second time in less than a week, the business intelligence software sector contracted as Hyperion Wednesday purchased rival Brio Software for $142 million in stock.

Sunnyvale, Calif.'s Hyperion will issue a combination of 0.109 of a share of Hyperion common stock and $0.363 for each share of Santa Clara, Calif.'s Brio common stock in a marriage of companies and long-time partners who make software that gauges the performance of businesses.

Hyperion also signed a separate OEM agreement with Brio, in which Hyperion will immediately begin reselling Brio's enterprise reporting, query and analysis, and dashboarding capabilities to Hyperion customers.

The merger attempt comes on the heels of a much larger acquisition bid in the same space, as Business Objects moved to buy Crystal Decisions last Friday for $820 million. The pending marriage also comes at a time of great fear, doubt and uncertainty in the business software space in the wake of Oracle's hostile takeover bid of rival PeopleSoft .

As with most mergers and acquisitions, Hyperion is looking to fill in some holes in its lineup. Hyperion plans to integrate Brio's Performance Suite and Metrics Builder to expand business intelligence beyond advanced query and analysis technologies to include information delivery through reporting and performance dashboards.

With Brio's software, Hyperion aims to capture customers earlier in the buying cycle when their needs grow from basic reporting against transactional systems to more complex, dynamic performance monitoring of key operational measures to key performance indicators (KPI) dashboarding.

"With Brio, we will gain one of the most innovative and pioneering companies in business intelligence, and our customers will gain integrated query, reporting and analysis tools that are renowned for their ease-of-use, quick deployment, scalability and remarkable power," said Jeff Rodek, chairman and CEO of Hyperion.

But some analysts aren't particularly excited about this purchase, considering the much larger acquisition Business Objects announced last week.

Mark Smith, senior vice president of research & CEO at Ventana Research, said this move was one more towards technology than applications for business performance management and is a short term move to address business intelligence (BI) competition.

"We believe the Hyperion acquisition of Brio is not a significant move that will impact the BI or Performance Management market," Smith told internetnews.com. "Since Hyperion had little traction with the OEM of Crystal Enterprise over the last year and half in a product called Hyperion Q&R, there does not seem to be any real demand by customers or push-traction by Hyperion in selling query and reporting."

Combined 12-month revenues for both companies total $613 million. Hyperion and Brio have approximately 2,700 employees combined, with more than 16,000 customers worldwide.

Brio shareholders will own approximately 10.5 percent of Hyperion after the completion of the transaction. The transaction has been approved by the boards of directors of both companies is expected to close in the fourth calendar quarter.