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![TMCNet: BluePhoenix buys DSknowledge assets for $3.7m: CEO Yaron Tchwella: In the third quarter, we started to see signs of stabilization of the business. [Globes, Tel Aviv, Israel]](http://images.tmcnet.com/siteart/invisible.gif)
BluePhoenix buys DSknowledge assets for $3.7m: CEO Yaron Tchwella: In the third quarter, we started to see signs of stabilization of the business. [Globes, Tel Aviv, Israel]
(Globes (Tel Aviv) Via Acquire Media NewsEdge) Nov. 12--Legacy software migration solutions developer BluePhoenix Solutions Ltd. (Nasdaq: BPHX; TASE: BPHX) today announced the acquisition of assets of DSknowledge Ltd. in cash and shares. The company also published its financial report for the third quarter of 2009. The results were mixed, compared with both the preceding quarter and the corresponding quarter of last year. Revenue fell steadily, but the company reported a non-GAAP net profit, compared with a net loss in 2008.
DSknowledge is an Israeli knowledge management software company, which modernizes and transforms legacy data, information, and content at enterprises into a single knowledge management database. BluePhoenix will pay $3.7 million for the assets, including $1.8 million BluePhoenix shares. It will also assume $1.2 million in debt. The price of the deal may increase, depending on DSknowledge's future performance. BluePhoenix expects to complete the deal by the end of the year.
BluePhoenix CEO Yaron Tchwella said, "The addition of Knowledge Management modernization products to our offering establishes BluePhoenix as an enterprise wide modernization company. We are excited to expand our portfolio of solutions as it enables us to modernize enterprises, starting from infrastructure components such as platforms and databases and ending with the modernization of the knowledge base. In addition, this offering will enable us to offer solutions to the marketing, IT and customer service departments creating a unique value proposition."
Tchwella added, "Knowledge management modernization is growing at a fast pace. DSKnowledge is the de-facto leader in Israel with customers including El Al Israel Airlines Ltd. (TASE: ELAL), Israel Credit Cards-Cal Ltd. (ICC-Cal) (Visa), Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR), Bezeq The Israeli Telecommunication Co. Ltd. (TASE: BEZQ), satellite broadcaster YES, Hot Cable Systems Media Ltd. (TASE: HOT), and DHL among others. We believe that our global sales force will enable us to expand the reach outside of Israel to additional enterprises around the world."
As for the financial results, BluePhoenix posted $18.7 million revenue for the third quarter, 15 percent less than the $22 million for the corresponding quarter of 2008, and 2 percent less than the $19.1 million for the corresponding quarter. The company edged the analysts' consensus of $18.5 million.
Non-GAAP net profit was $1 million ($0.05 per share), less than the $1.2 million net profit for the preceding quarter, but better than the non-GAAP net loss of $1.4 million for the corresponding quarter. The company met the analysts' consensus of earnings per share of $0.05.
GAAP-based net loss was $2.7 million or ($0.13 per share) for the third quarter, worse the net loss of $1.9 million for the preceding quarter, but better than the net loss of $6.8 million for the corresponding quarter of 2008.
Tchwella said, "In the third quarter we started to see signs of stabilization of the business and achieved our operational and financial targets for the quarter. A growing backlog and pipeline gives us increased confidence that the business is back on the right track and we expect that we will resume growth going forward."
BluePhoenix's share closed at $2.64 on Nasdaq yesterday, giving a market cap of $55 million. The share fell 4.8 percent by early afternoon on the TASE today to NIS 9.81.
To see more of the Globes or to subscribe to the newspaper, go to http://www.globes-online.com.
Copyright (c) 2009, Globes, Tel Aviv, Israel
Distributed by McClatchy-Tribune Information Services.
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