Tibco snaps up Staffware for £123m in "logical fit"

California-based Tibco is paying a healthy premium in an agreed £123m deal for UK business process specialist Staffware, driving the UK company's shares up by a third to over £8.

"It's a logical fit," said Ian Charlesworth, senior research analyst at the Butler Group. "As a matter of fact, we predicted it in our report a few months ago.

"Tibco has seen its market eroded by standards and web solutions and while Staffware is excellent in its software built for business process management it has lacked the US exposure. They'll have a formidable offering if they can integrate their products successfully."

Tibco's software grew out of a financial data integration system and the company is a spin-off from Reuters which went public in 1999. Staffware, which started up in 1984, is based on its workflow offering but has developed a business process management suite almost from scratch.

Philip Carnelly, software research director at Ovum, was more muted in his approval. "It's a sensible move. Both companies were doing quite well in business process management, but they both needed a shot in the arm.

"Workflow-type products are now being bundled into a wider offering and most of Staffware's competitors have disappeared. It's done well with BPM and I've been following it for years but £40m a year doesn't make it a very big player.

Tibco had similar problems and it's started to do well out of BPM but it's original products are now being offered by competitors as part of a wider package."

The purchase will take about a third of Tibco's $600m bank balance and the company has yet to say how much it expects the integration of its $300m, 900-strong firm with the UK outfit's 370 people and £50m turnover.

Both companies have an extensive network of international offices.