Bid.Com International Inc. Monday moved further away from its online-auction house past, announcing plans to acquire and adopt the name of Norwegian software vendor ADB Systemer ASA.
Pending approval at a Bid.Com shareholder’s meeting Oct. 10, the Mississauga, Ont.-based company will buy ADB Systemer and rename itself ADB Systems International.
“Having a dot-com appended to your name at this point in time doesn’t generate a positive knee-jerk reaction,” said Bid.Com president and CEO Jeff Lymburner. “For a long time we’ve enjoyed a high profile with Bid.Com, but it doesn’t apply to the business we’re in (now).”
In the spring of 2000, Bid.Com began moving away from the business-to-consumer auction business, focusing instead providing the back-end infrastructure and software for its client marketplaces. Bid.Com’s current customers include GE Capital Auto Financial Services and DBI Logistics Ltd.
Lymburner said the acquisition of ADB Systemer will afford access to a market previously untapped by Bid.Com
“We’re going to focus on a few verticals, particularly oil and gas,” Lymburner said. ADB’s customers include BP PLC, Haliburton Company ad Encal Energy Ltd.
The acquisition will also compliment Bid.Com’s e-procurement and online sales technology with ADB’s asset management, allowing clients to complete the buy-manage-sell asset lifecycle.
Lymburner said the acquisition shows Bid.Com is taking an aggressive approach despite the state of the high-tech economy.
“One of the things that has characterized this is sector is that a lot of companies crashed and burned,” Lymburner said, noting that Bid.Com has suffered like most of its competitors, but is still financially able to make acquisitions. “We’re in a fairly unique position. We’re now coming back with a vengeance.”
That might be a bit of an overstatement. Lymburner said the company has enough cash and marketable securities to cover the $13-million purchase of ADB and carry Bid.Com through to the third quarter of next year. But Bid.Com did report a loss of $3.8 million for the quarter ended June 30. As well, the purchase of ADB will involve the shedding of 30 per cent of Bid.Com’s workforce, matching the 30 per cent cut the company made in April.
“Unfortunately, the human cost ended up being a factor, but there are redundancies between the two companies,” Lymburner said.
Phil Cohen, director of Internet research at IDC Canada, questioned Bid.Com’s prudence.
“When you’re laying off people and taking on companies, I for one would be concerned,” he said. “On the other hand, their acquisitions appear to be right on.”
Cohen also expressed concern over the numerous vertical markets Bid.Com in which is involved. Bid.Com’s customers currently encompass automotive financing, online jewellery retail, used factory equipment and the golf industry.
“Like any business, what a company needs to do is pick something and get good at it,” Cohen said. “Bid.Com has several forays. It seems like they’re spreading their resources a little thin.”