Expense reporting tool supplier Concur today announced an agreement to acquire competitor Gelco Expense Management. Pending regulatory approval, Concur will pay $160 million in cash for Gelco's parent company, the privately held H-G Holdings, and Concur CEO Steve Singh said the deal should be complete sometime between October and December.
Singh said the acquisition would allow Concur to improve scale and expand market reach, particularly by using Gelco's technology to connect payment suppliers to its auditing services. "You're going to see the best of both worlds taking functionality to the next generation of technology," he said.
Bob Langsfeld, partner of the Incline Village, Nev.-based Corporate Solutions Group, said the acquisition is both good and bad news for corporate expense managers. "It's going to limit the alternatives and probably some of the creativity just because of competitiveness," Langsfeld said. "Overall, though, it's a good thing, and they'll be able to put all their resources directly into the products. It's a very healthy acquisition."
The Gelco platform still will be available to Gelco customers following the acquisition. Over time, Singh said customers would be able to evaluate whether they want to switch over to Concur's platform. "We want this to be a very seamless, easy process," Singh said.
In the expense management field, Concur and Gelco have touted different philosophies in their development goals. Following last year's acquisition of booking and expense tool provider Outtask
(BTN, Feb. 6, 2006), Concur has moved toward a single tool melding booking, expense and other supply chain capabilities. Gelco, meanwhile, has focused more on partnering with other suppliers, including TRX's booking tool ResX
(BTN, April 23), to meet those needs.
Langsfeld said the differing approaches should not be a major obstacle as Concur brings Gelco into its fold. "There's no reason why they can't take advantage of those relationships," Langsfeld said.