Sep. 11, 2006

Illinois Tool Works (ITW) has acquired advanced partner relationship management (PRM) Click Commerce for about $292 million.

Reportedly, ITW CEO David Speer saw synergy in the deal, stating that Click Commerce made a name for itself by "working with manufacturing and industrial companies-- business segments that it knows very well."

This isn't the first eBusiness deal of its kind, with 3M having acquired supply chain execution (SCE) software specialist HighJump two years ago.

As far as ITW's governance and operations model, AMR notes that the company consists "of approximately 700 decentralized business units each of which operates essentially autonomously." As such, ITW will allow Click Commerce a measure of autonomy while standing by to provide resources for growth, particularly by acquisition.

While this is good, AMR points out that thee absence of other software holdings in ITW's portfolio means that "the transaction lacks the typical cross-selling or technology synergies a traditional software holding company would bring to the table."

Moreover, Click Commerce customers should be concerned about ITW's stated 80/20 model: " Put simply, too often companies do not spend enough time on the critical 20 percent of their key customers and products and spend too much time on the less important 80 percent."

This may mean a change in service levels for Click's smaller customers, so they would do well to press the company for details.

Source: Line 56