STAMFORD, Conn., 1 February 2005 — Gartner, a provider of research and analysis on the global information technology industry, and META Group, an information technology research and consulting firm, announced that the companies have reached an agreement under which Gartner will acquire META Group in an all-cash transaction valued at $10 per share, or approximately $162 million. The boards of directors of both companies have unanimously approved the agreement. The merger is expected to be completed by the second quarter of 2005 with a certain amount of bloodshed as overlapping management and offices are cut.
In 2003, Gartner generated $858 million in revenue from 76 locations around the world, while META Group generated $122 million in revenue from 52 locations. The acquisition of META Group will bring valuable additional dimensions to Gartner’s already strong core research capabilities. Moreover, the addition of a sales team from META Group that is already highly conversant in Gartner’s product and service offerings will enhance Gartner’s ability to grow sales going forward. Gartner believes that the combination will also drive operational efficiency given the complementary nature of the two companies.
“Gartner and META Group are both based in Stamford and share complementary business models, which will allow easy integration of META Group’s offerings into Gartner’s existing service portfolio,” said Gene Hall, Gartner’s CEO. “This transaction is an exciting opportunity that will give us increased depth in key sectors, geographies and markets and an increased ability to seize revenue opportunities with the addition of META Group’s well-trained, successful sales force. In sum, the acquisition will make Gartner a stronger company with increased opportunities for growth and greater resources to offer clients.”
The acquisition was not a big surprise. Companies such as IDC, Forrester, Gartner and Yankee Group have all been jostling in a shrinking earning space for IT research. Gartner’s take over of META Group is just the latest merger of market research firms and signals a continuing consolidation trend in the industry. Jupiter Research’s Media Metrix, Giga Information and PricewaterhouseCoopers have all been caught up in the wave. Analysts claim that META Group had weaknesses in certain research segments and had been having difficulty obtaining new business.
It is thought that the acquisition will enhance Gartner’s bottom line if costs can be contained. The situation may not be so bright for the enterprises who rely on these firms to provide insight. Fewer analysts mean that there are fewer opinions available and fewer sources of independent information to consider when making decisions.