Not to be outdone by its integrated energy industry brethren,the energy transaction software industry is also encountering itsfair share of consolidation. Altra Energy announced its third majoracquisition of the year Monday, as the Houston-based softwareprovider entered into a definitive agreement to purchaseTransEnergy. Terms of the agreement between the two privatecompanies were not disclosed, but Paul Bourke, Altra’s CEO, saidthe 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 electronictrading system, establish the overall company as the preferredchoice for energy trading, transmission and transportatione-commerce-based business solutions,” Bourke said. “Through theintegration of these processes, we are helping to create an energymarketplace in which transactions are consummated and scheduled viathe Internet.”

Starting this week, Altra will halt the marketing of allTransEnergy products, including the popular TransEnergy GasManager. “Our sales team will only focus on Altra products fromhere on out,” said Mara Van Nostrand, an Altra spokesperson.”People who have just recently bought TransEnergy products will getthe same customer support and service they expected, but our teamwill no longer actively promote TransEnergy material.”

Rusty Braziel, Altra’s chairman of the board of directors, saidthe acquisition has more to do with the gain of expertise than thegain of assets. “The most important thing in this combination ofthe two companies is the expertise of the people.”

At one level or another, merger talks between the two companieshad been thrown around for four years, Braziel said. The talksbecame serious negotiations in 1998. The merger occurred one monthafter TransEnergy performed a major restructuring effort thatincluded a 20% staff reduction. Mike Montgomery, TransEnergy’s CEO,said those layoffs, which affected every department except customerservice and research and development, were not executed inanticipation of this merger.

Instead, Montgomery said the merger was the result of the twocompanies’ shared goal “to be the leading provider of transactionmanagement and risk software in the wholesale sector of the energyindustry. We have both long recognized that there would be anatural fit between our companies that would capitalize on ourshared synergies.”

Bourke said limited layoffs have already occurred at bothcompanies and that no more are expected. TransEnergy’s staff willmove into Altra’s downtown Houston headquarters by the end of theyear.

Altra began its buying spree earlier this year with the Januaryacquisition of its main competitor in the electronic tradingplatform market, Quicktrade. The company combined trading platformslast month, forming Altrade. Mark Crosno, president of AltraElectronic Trading Services, said since the Quicktrade merger, thetop 75 traders on the system (in terms of volume traded) have beenretained and the company has actually increased its client base.Altra also bought a large risk management software producer, EnergyImperium, last March.

Bourke said Altra has a lot to offer TransEnergy customers. “Weare aiming for a 100% client retention rate from this deal, butonly time will tell…Our hope would be to convince an El Paso or aWilliams (both TranEnergy software customers) that from a talentpoint-of-view and a financial strength point-of-view they shouldfeel better about their situation now than they did [before themerger].”

It is too early to tell if the next upgrades to Altra’s softwarewill incorporate TransEnergy’s features a functionalities, VanNostrand said. Altra is scheduled to release an update of its gasmanagement software by the end of this year.

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