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Symyx Plucks MDL Informatics from Elsevier, Plans Biology ELN, But ‘Roadmap’ Undecided

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Last week, Symyx Technologies said that it plans to acquire MDL Information Systems from scientific publishing giant Elsevier in a $123 million all-cash deal.
 
Symyx, which develops electronic laboratory notebooks and other scientific decision-support software, intends to take advantage of MDL’s estimated 50,000 users worldwide in an effort to build up the customer base for its existing ELN product line.
 
In an interview with BioInform, Symyx CEO Isy Goldwasser said the acquisition, which is expected to close in the fourth quarter, grew out of the company’s strategy to expand the reach of its ELN products. MDL’s life science informatics products, which include MDL Draw, MDL Direct and Available Chemicals Directory, were a plus, he said, but less significant.
 
“To accelerate the adoption of ELNs was a key factor” in the acquisition, he said.
 
Symyx projects that revenues for the combined entity will be $100 million in 2008. The company’s 2006 revenue was $124.9 million, contrasted with the prior year’s figure, at $108.1 million. The company did not offer specific numbers for its ELN revenue.
 
Symyx, based in Santa Clara, Calif., is still working out the “product roadmap” for integrating the MDL product line with its own. The timeline for an announcement on this is around late October, according to Theresa Thuruthiyil, vice president of investor relations for the company.
 
“When we look at their product line and ours we are just thrilled to see how complementary the two are and we really do believe that a lot of the product focus they’ve had with their various packages, like MDL Draw and [MDL] Direct, and such, fit so nicely with what we are trying to do in terms of bringing information to scientists’ desktops through our ELN,” Thuruthiyil told BioInform this week.
 
In a conference call announcing the deal last Friday, Goldwasser said that Symyx is working closely with MDL to determine the new structure of the combined entity, including the size and makeup of the sales force. “This significantly accelerates our efforts to expand the sales force,” he said during the call.
 
Symyx currently has 400 employees and MDL boasts 300 staff members, according to Thuruthiyil. As to whether those numbers would grow or shrink now, Goldwasser would not say. He also declined to provide further details on hiring plans or potential staff reductions, other than to say it was still being worked out, and would be part of the announcement for the roadmap going forward.
 
“We can’t really discuss that,” he said. “We aren’t looking at it, though, as MDL staff or Symyx staff. We are looking at it as integration planning right now. Really, the day after we announced [the acquisition] was the first day we began to really, in detail, plan out with MDL what the integration would look like, and we are still in the middle of that process.”
 

“To accelerate the adoption of ELNs was a key factor” in the acquisition.

The integration process will include not only what he and Thuruthiyil called the “complementary” nature of the two companies’ software tools, but a move into the biology space, an area as yet unaddressed by the company, which currently targets the chemical and life science markets. Its preexisting line includes ELNs and scientific decision-support software and automated laboratory systems/workflows.
 
When asked if Symyx intends to offer ELNs for biologists, Goldwasser confirmed that since MDL has products that “interface with biology,” he believes that the company will move into that area in the long term.
 
Meanwhile, Symyx will continue offering Elsevier’s CrossFire Beilstein database and other scientific databases through MDL’s Discovery Gate. “In the near term, we negotiated the acquisition with peripheral agreements that would leave the customer experience intact,” Goldwasser said.
 
Terms of the deal called for Elsevier to retain a group of databases, while Symyx purchased the rest, Goldwasser said.
 
“We are going to have a long-term relationship with Elsevier because obviously, the software is a channel for the clients, for the customers to access those databases,” he said.
 
“We want to make sure the customer experience is preserved, and it’s important to us, so there are some very sensitive service-level agreements that are ongoing,” Goldwasser said.

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