Eagle Professional Resources Inc.

In this Issue: > General Interest > Company News > Merger & Acquisition Activity > Primary Sources

> GENERAL INTEREST

Canada’s annual rate of inflation was 1.6 percent in February, higher than expected, Statistics Canada reported.

The new Canadian Staffing Index released by the Association of Canadian Search, Employment and Staffing Services in conjunction with Staffing Industry Analysts registered a reading of 74 in December — 31% below its October high of 78 and 26% below the benchmark July 2008 reading. Still, the December number indicates a recovery is under way, but it is a slow and steady recovery. Although December’s reading is lower than October’s, that could reflect the impact of holidays during December. In addition, the lower readings in November and December could have been influenced by Ontario Bill 139 and its negative impact on staffing.

According to a new report by the Institute for Labour Market Research (IAB), unemployment in Germany is forecast to average 3.5 million in 2010. This would be an increase of 120,000 over 2009. Gross Domestic Product (GDP) is estimated to grow by 1.75% during 2010.

According to management consulting firm McKinsey Germany, there will be a shortage of personnel in the German labour market by 2015, which is expected to rise to 2 million unfilled posts by 2020 due to the demographic changes, which are expected to take place over the next ten years.

The latest Labour Force Survey published today by Statistics Sweden (SCB) reveals that in February 2010, 459 000 persons aged 15-74 were unemployed. This is an increase of 72 000 compared to February 2009. The unemployment rate was 9.3 percent of the labour force in February 2010. This is an increase of 1.3 percentage points compared to February 2009.

The European Union’s statistical office (Eurostat) has published its first estimate of labour market data for the fourth quarter of 2009. The number of persons employed in the 16 countries which share the Euro as a common currency (EA16) fell by -0.2% (-347 000 persons) in the fourth quarter of 2009 compared with the previous quarter.

The latest Labour Market Monitor published by the Association of Large Temporary Employment Agencies (Agett) estimates that by the end of the first quarter of 2010, unemployment in Spain will have reached 20% or 4.5 million individuals, almost half a million more than in Q1 2009.

The U.S. lost an estimated 20,000 nonfarm, private sector jobs in February on a seasonally adjusted basis, according to Automatic Data Processing Inc.’s monthly employment report.

Worldwide executive search revenue fell 32.5% in 2009 to $7.43 billion from 2008 revenue of $11.0 billion, according to a new report by the Association of Executive Search Consultants. The report does indicate growing activity in senior management hiring during the fourth quarter of 2009. This increased activity is yet one more indication of recovering economies worldwide.

The “vast majority” of IT budgets will not grow this year, said analyst house Ovum. Only a third of CIOs globally expect their budgets to grow in 2010, according to Ovum’s new survey of chief information officers, and 42 percent will leave budgets unchanged. Last year, four in 10 businesses in the UK and Italy reduced their IT budgets. The findings agree with those of TechMarketView, which predicted that UK software and services spending will decline this year. But they conflict with Forrester’s recent report, which said that the IT spending downturn was over. However, the survey found that while spending is on an upwards trend, with one third of CIOs expecting their budgets to increase in 2010, most increases will be between just one and five percent. Ovum surveyed 529 IT decision makers in the second half of 2009 for the report.

Canada added 20,900 jobs in February, according to seasonally adjusted numbers released by Statistics Canada. The national unemployment rate fell to 8.2% in February from 8.3% in January. Canada gained 60,200 full-time jobs in February, but the number was partially offset by a loss of 39,300 part-time jobs. Also, the Royal Bank of Canada released a forecast that Canada’s gross domestic product would grow by 3.1% in 2010 and 2.9% in 2011. It also forecast Canadian unemployment will average 8.4% in 2010 and drop to an average of 7.7% in 2011.

A US judge sentenced a hacker who stole more than 40 million debit and credit card numbers to 20 years in prison and $25,000 in fines. Albert Gonzalez, 28, had previously pled guilty to breaking into accounts held by customers of Barnes & Noble, OfficeMax, BJs Wholesale Club, TJX, and other retailers. Prosecutors said the hacks resulted in more than $200 million in losses and damages.

> COMPANY NEWS

Microsoft plans to spend US$9.5 billion on research and development this year, which according to Microsoft, is more than any competitor. Much of Microsoft’s investments center around “cloud” services, or online computing provided to users from hosted data centres.

Anne Mulcahy, Chair of Xerox, is leaving the board. She was chief executive officer from 2001 until 2009 and is credited with turning the printer and copier manufacturer around. She started her career as a salesperson in 1976.

> MERGER & ACQUISITION ACTIVITY

CA reportedly paid about $90 million for cloud computing technology provider 3Tera Inc. CA plans to extend 3Tera’s AppLogic platform (which currently operates on Xen) to support both VMware ESX and Microsoft Hyper-V. AppLogic will become part of CA’s cloud products and solutions business line, which fits broadly with CA’s recent acquisitions of Oblicore and Cassatt Corp. Oblicore looks at service levels and translates performance data into business metrics; 3Tera makes it easier to move applications to a cloud environment; and Cassatt helps with optimization to determine “the smartest way to do all of this. Another big attraction to 3Tera was the company’s customer base of enterprise clients and service providers.

CA announced the $350 million acquisition of Nimsoft, a privately held supplier of system monitoring to startups, managed service providers and cloud computing. Nimsoft has developed monitoring capabilities for such online systems as Google Apps for Business, Salesforce.com CRM, the Rackspace Cloud, and Amazon Web Services’ EC2 cloud infrastructure services. In addition, Nimsoft can monitor the availability of internal databases, applications, and physical and virtual servers.

CA recently added a new business unit, Cloud Products and Solutions, under its former mainframe senior VP, Chris O’Malley, now executive VP of the business unit. Nimsoft marks its fifth acquisition in 10 months. CA purchased data center automation supplier Cassatt last June, network service level monitoring provider NetQoS in November; and IT service level management supplier Oblicore in January; and its latest deal was for 3Tera in February. Nimsoft was established in 1998 and has 800 customers, including almost 300 managed service providers. Its customers are located primarily in the U.S. and Europe.

The recession and growing software-as-a-service (SaaS) trend have not been kind to CRM vendor Chordiant Software. But if a planned $161.5 million acquisition announced this week goes through, buyer Pegasystems, a business process management and rules management firm, may end up with a bargain. Chordiant has been a pioneer in customer experience management and, more recently, an innovator in applying predictive analytics to customer interactions. The company has an enviable list of financial service, insurance, and telecommunications customers, including Citibank, Capital One, MetLife, Cigna, Wellpoint, T-Mobile, and Vodafone. Amid the recession, however, Chordiant has struggled to land new customers for its on-premises software. For its fiscal year ended September 30, 2009, revenues were down more than 30% to $77.5 million from $113.0 million in 2008. New license revenues sank 34% to $22.5 million, down from $34.1 million in 2008. Chordiant, which was founded in 1997 and is based in Cupertino, Calif., is swimming against a SaaS current that is particularly strong in CRM, with Salesforce.com and Microsoft Dynamics Online, among others, reporting strong growth. Gartner data confirms that SaaS versions of CRM accounted for a fifth of the $9.15 billion worldwide CRM market in 2008, up sharply from 15% in 2007. What Pegasystems sees in Chordiant is a loyal customer base, a focus on the high-end, enterprise market (where SaaS isn’t quite as strong), and robust predictive analytics capabilities. Most particularly, it sees a ripe market with many companies looking to replace aging legacy CRM systems. In an encouraging sign for Chordiant, the CRM vendor’s results in the most recent quarter showed narrowing losses and an upturn in sales. Prospects could improve if Pegasystems can increase the speed of CRM implementations.

Allegis Group Services struck a deal to acquire the managed services operations of The Albany Group. Albany originally established its managed services operations for U.K. contractors working in Germany; Albany later expanded the operations across Europe and into Asia, the U.S., South America, Africa and Australia. The Albany Group’s U.K. operations had been suspended in February after banking difficulties arose, although its U.S. operations, which used a different bank, continued. An administrator in the U.K. is in the process of selling portions of Albany. In addition to managed services, Albany also provides payrolling services and independent contractor compliance services.

Avnet will become a $20 billion player in the value added distributor marketplace with the acquisition of Bell Microproducts. Avnet will pay US$252 million for the storage-centric distributor. In total, Avnet will be responsible for US$594 million as they will assume a net debt position for Bell to the tune of $342 million. Bell Micro’s data centre products business and its embedded systems will be integrated into Avnet’s offerings in hopes of boosting cross-selling opportunities.

• IT Industry News
• News from the Nest