Electronic-commerce software-maker E.piphany Inc. said Wednesday that it would acquire Octane Software Inc. for stock valued at $2.4 billion in a deal that underscores the growing interest in companies that help businesses manage customer interaction.
Amid a broad sell-off of technology issues on the Nasdaq stock market, shares of E.piphany fell nearly 25 percent after the announcement, slicing $800 million off the deal’s original value of $3.2 billion. E.piphany closed at $187, down $61.93 from Tuesday’s close of $248.93.
E.piphany, based in San Mateo, said the deal gives it more salespeople and customers. The company, which went public last year, had revenue of $19.2 million in 1999 and has a current market value of $9.1 billion.
Octane Software, founded in 1997, had been considering going public before agreeing to be acquired. E.piphany said Octane had $3 million in revenue last year and is expected to have $35 million in revenue this year.
Privately held Octane, also based in San Mateo, makes software that manages sales and customer service and support operations.
The terms of the deal call for E.piphany to issue about 12.8 million shares of its common stock to Octane’s shareholders. On a fully diluted basis, Octane shareholders would hold about 26.5 percent of the combined company, the companies said.
