ClickSoftware Could Be Up For Sale Soon

ClickSoftware Technologies Ltd. (CKSW), a small company making a presentation at the C.E. Unterberg, Towbin conference, could be up for sale in the near future. The company's stock has gained 16.5% in recent days, and this could not have been solely due to the fact that it has now announced a date for its next report (July 25), and thus spared us the prospect of an unanticipated profit warning. The real reason for the gain could, perhaps, lie in the company’s filings with the US Securities and Exchange Commission [SEC].

On Monday, ClickSoftware held its annual shareholders meeting, where it was to propose, among other things, a change in the company's articles of association that would allow it in the future to pass a resolution for the sale or merger by an ordinary majority of shareholders, rather than the statutory 75% of shareholders present at a meeting. ClickSoftware has not explicitly said that it was in talks for such a sale or merger, but one can safely assume that if the management asked for such a change, then a deal could be in the offing.

Lessons of Taro

It could well be that the case of Taro Pharmaceutical Industries Ltd. (TAROF.PK) set off a red light at ClickSoftware, since Taro, as is known, is now embroiled in a bitter battle between its owners and a number of large shareholders over its proposed sale to the Indians. Taro too will need the backing of a 75% majority of its shareholders for the sale. ClickSoftware has two large shareholders who jointly own 22% of the company, and who, if they wished, could easily muster a 25% minority of shareholders to block any sale.

ClickSoftware is a small software company which has been focusing on a niche that has become highly important in recent years - mobile workforce management and service optimization solutions, primarily for organizations that employ large numbers of service staff. Its leading customers include utility companies, particularly those in the US, which purchase software like that of ClickSoftware in order to manage the costs of worker mobility in the face of soaring fuel costs.

Among the companies that are likely, I believe, to make an offer for ClickSoftware are, naturally, Oracle Corp. (ORCL), the largest player in its field, but also IBM Corp. (IBM), with which ClickSoftware has been collaborating. One could even think of hardware companies, such as Cisco Systems Inc. (CSCO), which, lately has been buying software companies too. ClickSoftware could complement it technologically, in what it describes in principle, as "mobility solutions for large enterprises."

CKSW 1-yr chart:

Published originally by Globes [online], Israel business news - www.globes.co.il
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006. Republished on Seeking Alpha with full permission.