Thursday, December 3, 2009

Gartner to Acquire AMR Research, Inc.


The Magic Quadrant may be looking to encompass more than IT concerns.

AMR conducts research for supply chain and IT Executives.

See, I told you IT Executives were identical to Purchasing Agents.
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STAMFORD, Conn. - Gartner, Inc. (NYSE: IT), the leading provider of research and analysis on the global information technology industry, today announced that it has agreed to acquire AMR Research, Inc. for approximately $64 million in cash, subject to certain closing adjustments. With projected full year 2009 revenues of approximately $40 million, AMR Research is a leading research and advisory services firm serving supply chain management and IT professionals. The firm is recognized for its research focused on the intersection of business processes and technology for the supply chain professional.

The acquisition of AMR Research is expected to expand Gartner’s suite of research offerings and also complement its consulting and events businesses. Moreover, the addition of AMR Research’s experienced sales team should enhance Gartner’s ability to further penetrate the vast market opportunity for syndicated research. The combination is also expected to drive operational efficiencies and cost savings.


Gene Hall, Gartner’s chief executive officer, said, "AMR Research is an excellent strategic fit for Gartner. The firm is the market leader for research related to supply chain management, which is inextricably linked to IT and has become a central and growing issue for many organizations. We expect the acquisition to give us immediate presence in this market and the ability to generate substantial synergies by selling AMR Research products to Gartner clients and Gartner products to AMR Research clients. The addition of AMR Research’s team of approximately 40 research analysts and 45 sales executives should enable us to offer expanded resources to our clients and increase our opportunities for growth"

Tony Friscia, AMR Research’s chief executive officer, commented, “Gartner’s scale and worldwide distribution will enable AMR Research to sell its world-class products to a much larger client base than it ever could as an independent company. This transaction is a unique and exciting opportunity for AMR Research.”

Gartner intends to finance the acquisition through the use of cash on hand, as well as borrowings under the Company’s existing line of credit. The transaction is subject to customary closing conditions and is expected to close later this month.

Gartner does not expect the acquisition of AMR Research to have a material impact on its 2009 financial results, but does expect it to be significantly accretive to its revenue, earnings and cash flow over time. On a reported GAAP basis, which includes the impact of estimated acquisition and integration related charges, the transaction is expected to be dilutive to income per share by ($0.11) - ($0.09) in 2010 and accretive to income per share by at least $0.01 - $0.04 in 2011. Excluding estimated acquisition and integration related charges, the transaction is expected to be modestly accretive to income per share in 2010 and add at least $0.04 - $0.06 to income per share in 2011. See "Non-GAAP Financial Measures" for a discussion of income per share, excluding estimated acquisition and integration charges. The Company will provide additional information on the transaction on its fourth quarter 2009 earnings conference call.

Non-GAAP Financial Measures

Investors are cautioned that income per share, excluding estimated acquisition and integration related charges, contained in this press release is not a financial measure under generally accepted accounting principles (GAAP). In addition, it should not be construed as an alternative to any other measures of performance determined in accordance with GAAP. This non-GAAP financial measure is provided to enhance the user’s overall understanding of the expected impact of the acquisition of AMR Research on Gartner’s future operating results. We believe that income per share, excluding estimated acquisition and integration related charges, is an important measure of the expected benefits from the acquisition of AMR Research as it excludes charges that may not be indicative of Gartner’s core ongoing operating results.

The following is a reconciliation of the expected impact of the acquisition of AMR Research on income per share, excluding estimated acquisition and integration related charges, to GAAP income per share:

2010 - 2011

Expected impact on GAAP income per share ($0.11) - ($0.09) $0.01 - $0.04
Estimated acquisition & integration related charges (1) $0.11 - $0.10 $0.03 - $0.02
Expected impact on income per share, excluding estimated
acquisition and integration related charges $0.00 - $0.01 $0.04 - $0.06






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