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Austin’s Lombardi acquired by IBM

Austin-based software maker Lombardi Inc. said today it has agreed to be acquired by IBM Corp.

Financial terms were not disclosed.

Lombardi develops business process management software, which cuts costs by increasing efficiency in everyday business processes such as communicating with suppliers or handling billing.

The company, named after football legend Vince Lombardi, was created in 1998 as a division of now-defunct Austin software company Open plus Inc. and spun off in 2000.

Over its lifetime, privately held Lombardi raised $64 million in venture capital from Austin Ventures, InterWest Ventures and Palomar Ventures.

CEO Rod Favaron said “this is very exciting for us. We’ve been building this business for a number of years and this is a tremendous next step. this marketplace is really exploding and frankly the demand is outpacing our ability to scale. getting to plug into a global leader like IBM is a great next step for us.”

Lombardi’s 200 employees, 120 of them in Austin, are expected to remain with the company, Favoron said. IBM officials added that they plan to accelerate Lombardi’s efforts.

“Lombardi has built a world-leading team and product, and the passion and vision that the team has is an incredibly good fit for us,” said Craig Hayman, general manager for IBM Application and Integration Middleware. “Together we will take what’s created here in Austin and deliver it all over the world.”

Lombardi is the latest in a string of acquisitions of Austin tech companies by bigger players. last month, LifeSize Communications Inc., an Austin-based developer of videoconferencing equipment, agreed to be bought in an all-cash deal by Swiss company Logitech International for $405 million, one of the highest prices paid for a local company in recent years. In September, NetQoS, which sells network performance management software, was sold to CA Inc. for $200 million in cash.

For Lombardi, joining forces with IBM provides access to the technology giant’s global sales force and customer base, as well as product development resources. In return, Lombardi gives IBM a foothold in the fast-growing business process management market.

Forrester Research analyst Connie Moore called Lombardi an ideal pick for IBM.

“Lombardi has been such a shining star in terms of its product, the quality of its customers and the quality of employees. it was always a little company that pulled way above its weight and was just really high caliber,” Moore said. “It’s not surprising that if IBM was in the looking-to-buy mode that it chose these guys.”

Lombardi has 300 customers in a range of industries including financial services, government, health care, telecom and manufacturing. They include Ford Motor co., Dell Inc. and Pfizer. The company doesn’t disclose revenue, but said that in fiscal 2008, its sales almost doubled, rising 47 percent over those in 2007.

Lombardi has long been considered a candidate for an initial public offering, but Favaron said IBM offered the best opportunity for growth.

“All along, the plan was global dominance, and to fund that you either have to work with a company that already has a footprint or you go public. We always maintained options, and from our perpective, this one makes much more sense for the customers and the investors.”

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Austinites love to be heard, and we’re giving you a bullhorn. We just ask that you keep things civil. Leave out the personal attacks. Do not use profanity, ethnic or racial slurs, or take shots at anyone’s sexual orientation or religion. if you can’t be nice, we reserve the right to remove your material and ban users who violate our Visitor’s agreement. Click here to report comment abuse.

December 16, 2009 11:20 AM | Link to this

To quote Vince Lombardi — “The only place success comes before work is in the dictionary.”

December 16, 2009 4:03 PM | Link to this

CEO Rod Favaron said this is very exciting for us. Weve been building this business for a number of years and this is a tremendous next step. this marketplace is really exploding and frankly the demand is outpacing our ability to scale. getting to plug into a global leader like IBM is a great next step for us.

Mr Favaron needs to understand that this is really not a next step, but a last step for Lombardi as he knows it.

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