Activant to buy Prophet 21

In another example of the continuing consolidation of the distribution software industry, Prophet 21 has been acquired by Activant Solutions Inc., an Austin, Texas-based business-to-business software firm, for $215 million.

Activant acquired Prophet 21 to give it the No. 1 position in the wholesale distribution market, said Doug Levin, Prophet 21's executive vice president. Prophet 21 will become the wholesale distribution unit for Activant, he said.

Prophet 21, which acquired Trade Service Systems Inc., the largest provider of business software for distributors in August 2004, has interests in several different segments of the distribution industry. The electrical market is one of its larger business segments.

Activant Solutions provides business management solutions to small- and medium-sized businesses in wholesale distribution, hardware and home center, lumber and building materials, and the automotive parts aftermarket. Activant Solutions also provides software and related services for IDEA's IDW2. IDW2 is a central repository for pricing and product data for the electrical industry.

Activant will continue to support and enhance Prophet 21 products as well as Activant's current wholesale distribution offerings, including Activant Prelude and Activant Eagle for Distribution. Activant now has 22,000 customers overall. The acquisition would give it more than 4,000 customers in the distribution market.

Prophet 21 was founded by John and Dorothy Meggitt in 1967. The company's management team recently bought the company and took it private. According to a report last year in Modern Distribution Management, in 2003 the management team bought the company with a $70-million cash deal from the Meggitts, who had been 51.2 percent shareholders. Prophet 21 went private through a merger agreement with an entity formed by Thoma Cressey Equity Partners Inc., Chicago, and LLR Partners Inc., Philadelphia.

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