Altra Throws TransEnergy into Shopping Cart
Not to be outdone by its integrated energy industry brethren,
the energy transaction software industry is also encountering its
fair share of consolidation. Altra Energy announced its third major
acquisition of the year Monday, as the Houston-based software
provider entered into a definitive agreement to purchase
TransEnergy. Terms of the agreement between the two private
companies were not disclosed, but Paul Bourke, Altra's CEO, said
the combined company's annual revenue will grow into the $50 to
$100 million range.
"The combined companies' numerous software installations,
together with more than 1,200 users of the Altrade T electronic
trading system, establish the overall company as the preferred
choice for energy trading, transmission and transportation
e-commerce-based business solutions," Bourke said. "Through the
integration of these processes, we are helping to create an energy
marketplace in which transactions are consummated and scheduled via
Starting this week, Altra will halt the marketing of all
TransEnergy products, including the popular TransEnergy Gas
Manager. "Our sales team will only focus on Altra products from
here on out," said Mara Van Nostrand, an Altra spokesperson.
"People who have just recently bought TransEnergy products will get
the same customer support and service they expected, but our team
will no longer actively promote TransEnergy material."
Rusty Braziel, Altra's chairman of the board of directors, said
the acquisition has more to do with the gain of expertise than the
gain of assets. "The most important thing in this combination of
the two companies is the expertise of the people."
At one level or another, merger talks between the two companies
had been thrown around for four years, Braziel said. The talks
became serious negotiations in 1998. The merger occurred one month
after TransEnergy performed a major restructuring effort that
included a 20% staff reduction. Mike Montgomery, TransEnergy's CEO,
said those layoffs, which affected every department except customer
service and research and development, were not executed in
anticipation of this merger.
Instead, Montgomery said the merger was the result of the two
companies' shared goal "to be the leading provider of transaction
management and risk software in the wholesale sector of the energy
industry. We have both long recognized that there would be a
natural fit between our companies that would capitalize on our
Bourke said limited layoffs have already occurred at both
companies and that no more are expected. TransEnergy's staff will
move into Altra's downtown Houston headquarters by the end of the
Altra began its buying spree earlier this year with the January
acquisition of its main competitor in the electronic trading
platform market, Quicktrade. The company combined trading platforms
last month, forming Altrade. Mark Crosno, president of Altra
Electronic Trading Services, said since the Quicktrade merger, the
top 75 traders on the system (in terms of volume traded) have been
retained and the company has actually increased its client base.
Altra also bought a large risk management software producer, Energy
Imperium, last March.
Bourke said Altra has a lot to offer TransEnergy customers. "We
are aiming for a 100% client retention rate from this deal, but
only time will tell...Our hope would be to convince an El Paso or a
Williams (both TranEnergy software customers) that from a talent
point-of-view and a financial strength point-of-view they should
feel better about their situation now than they did [before the
It is too early to tell if the next upgrades to Altra's software
will incorporate TransEnergy's features a functionalities, Van
Nostrand said. Altra is scheduled to release an update of its gas
management software by the end of this year.