Meetings technology vendors OnVantage and StarCite today announced a merger that will take the StarCite name and OnVantage technology. Venture capital investors of both companies brought the firms together with the hope that by combining the two Web-based meeting management firms, they can accelerate penetration into corporate markets.
Combined, the two companies would provide more than 135 multinationals and hundreds of others with meeting management technology, sourcing and consulting services, and deliver $5 billion worth of meeting revenue opportunities (double what either provided alone) to more than 93,000 suppliers. Some of the biggest names in meetings management and sourcing also rely on the technology, including: American Express, BCD Meetings & Incentives, Conference Direct, Conferon Global Services, HelmsBriscoe and Maritz Travel.
OnVantage and StarCite also have developed private-label technologies for Accor, Fairmont, Hilton, Hyatt, InterContinental, Omni, Starwood and Wyndham hotels. By combining, they also double the number of attendee registrations they will process for corporations, to 2.5 million.
This merger of the titans follows three years of consolidation that brought StarCite and OnVantage to where they are today: market leaders with "only about 3 percent of meetings spend currently under management," according to StarCite president and CEO Michael Boult. "This business is a virtually untouched frontier of corporate spending."
In 2003, StarCite acquired registration competitor b-there Corporation, doubling its revenues and share of the registration market. A year later, PlanSoft and seeUThere merged to form OnVantage, after merger talks between PlanSoft and StarCite failed.
"The time is right for this merger," said OnVantage CEO John Chang. "Together, we will clarify the choice for buyers when selecting a meeting management partner and significantly accelerate adoption of this technology around the world."
Dozens of companies--among them Concur Technologies through its acquisition of Outtask, GetThere, Certain Software, Carlson Meeting Logics, ISIS, Cvent, Group Travel Planet, Passkey, Newmarket--pitch meeting technology. However, Boult said the biggest competitors remain "apathy, procrastination and an overflowing inbox." Added Chang, "There are lots of point solutions that solve a piece of the problem. We believe we are the largest in solving the entire problem."
Chang also said merger talks began in April at the board level. "With two really strong companies that have battled it out in the marketplace, you have to start at the board level," he explained. The deeper they delved, the more synergies they found. For example, OnVantage just deployed EasyBook, an online booking tool for small meetings. Although representing the largest portion of a corporation's meetings and spend--up to 80 percent--StarCite hadn't developed a special product to address that.
OnVantage's technology platform, quietly deployed last year after the merger with PlanSoft, also fit as a new "go forward" technology platform for the new StarCite. As part of their integration strategy, the companies plan to support both the StarCite and OnVantage technology platforms until Dec. 2007. By then, the companies plan to introduce a new platform based on OnVantage's technology. Sooner, officials plan to introduce a fix that will allow suppliers to view requests for proposals from both companies using one interface, Chang said. "The challenge is that both companies power the technology of various suppliers. We intend to harmonize this quickly."
While StarCite this spring moved suppliers to its new Global Meeting Solution platform, announced with the merger with b-there in 2003, it did not migrate buyers to it. GMS was ready when the OnVantage talks intensified, Boult said, and rather than move customers twice, the company delayed migration for buyers.
The combined company will be headquartered in Philadelphia, with offices in Santa Clara, Calif. and Twinsburg, Ohio, as well as Dusseldorf, Hong Kong, London and Shanghai. Boult will serve as president and CEO, with Chang as chairman, driving the integration efforts. StarCite founder and executive chairman John Pino will serve as president of StarCite International, with a focus on international growth and partner strategies. PlanSoft founder and OnVantage president Ed Tromczynski has yet to take a position in the new company, but talks are continuing.
While meeting technology began emerging in the late 1990s, only in the past year or two has it matured enough for corporations such as AIG, Abbott Labs, Akamai Technologies, Amgen, Caterpillar, Cisco Systems, Hewlett Packard, Merrill Lynch, Motorola, Nestle, Pfizer, PricewaterhouseCoopers, Royal Philips Electronics and Shell to embrace it throughout their organizations, with some taking it around the globe. The companies use the technology to research, source, contract, budget and track meeting spend; drive efficiencies in these processes, as well as attendee management; and communicate and monitor policy compliance on spending.
Given that meetings often represent millions of dollars in spend for Fortune1000 corporations, managers are increasingly embracing such tools to help track and comply with Sarbanes-Oxley requirements. StarCite and OnVantage reported that, using their technologies and the application of meeting management practices, clients save an average of 15 percent off current spend.
"Implementing a strategic meeting management program is critical to a corporation that wants to maximize the value of the dollars it spends on enterprise-wide meetings, as well as increase its visibility into that spend in an efficient and scalable way," said Cisco Systems global meeting services manager Michele Snock. "With its global reach via the Internet, on-demand solutions and unmatched supplier database, the new StarCite enables a company to do just that."
Pro forma revenues for the combined company are growing at an annual run rate of more than 40 percent, StarCite's major investor, Internet Capital Group stated in a release. ICG expects to own 27 percent of the new company when the merger closes in the fourth quarter. Other venture capital owners of the combined company are Norwest Venture Partners, Texas Pacific Group, TL Ventures, iD Ventures America, IDG Venture Pacific, Seaport Capital and Strattech Partners, as well as Maritz Travel Company and DGG Holdings. Norwest and Texas Pacific Group were among the VCs leading the $18 million investment in OnVantage announced in January.
Today, Internet Capital Group owns 61 percent of StarCite. On its quarterly call with analysts, ICG emphasized a focus on mergers and acquisitions of its companies and detailed the benefits of two such mergers. Analysts on the call questioned how much longer it would take for some companies that have been in ICG's portfolio for five or six years to start delivering more substantial returns. ICG invested in StarCite in May 1999.
"StarCite and OnVantage have been separately focused on driving change in the corporate meetings and events industry, and now, together, have the opportunity to accelerate market adoption by several years, in a vast and largely untapped market," said Doug Alexander, managing director of ICG and StarCite board member. "At the ICG level, we view this as an exciting opportunity and important stepping stone to building and realizing significant value for our stockholders through an on-demand business that fits directly in the bulls-eye of our model."