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Contributors: Douglas McIntyre Jon C. Ogg

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Thursday, August 03, 2006

BAIT SHOP: IBM Acquires MRO Software

This morning IBM announced that it was acquiring MRO Software, INC. (MROI). MRO will become part of the Tivoli unit.

MRO Software is a provider of strategic asset and service management solutions. Maximo Enterprise Suite, the Company’s flagship solution, is delivered on a web-architected platform and increases productivity, optimizes asset performance and service levels, reduces costs and enables asset-related sourcing and procurement across the entire spectrum of strategic assets. The Company’s enterprise asset management software solutions allow customers to manage the complete life cycle of strategic assets including: planning, procurement, deployment, tracking, maintenance and retirement. Using MRO Software’s solutions customers improve production reliability, labor efficiency, material optimization, software license compliance, lease management, warranty and service management across the asset base. It is based in Bedford, Mass., with approximately 900 employees and more than 300,000 end-users. The Company markets its products through a direct sales organization in combination with a network of international distributors. MRO Software has sales offices throughout North America, Europe, Asia/Pacific and Latin America.

It looks like IBM bought this for even more product (service) rounding out and really to acquire more customers. This is a $740 million cash offer that values the company at $25.80 per share, and considering that it was a $10 stock 2 years ago and that it hasn't been around $25 since 2002 you should expect that not many shareholders will complain. Yesterday's closing price was $21.60.

Unfortunately, MROI never made it on to our official Bait Shop list because of its valuation and IBM-centric dependence. It was always a possibility that IBM could look at it, but usually we look for companies that may have more than only one natural predator.

Jon C. Ogg
August 3, 2006

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