Ontario Comments on Columbia Ultimate Acquisition and the Industry Impact

Yesterday’s announcement that Ontario Systems (Ontario) had acquired Columbia Ultimate Business Systems (CUBS) was big news in the ARM industry.

These two companies been competitors for years. Both have very mature products that are installed and used at major “players” in our space. Both companies have a large number of third party agency clients. However, what is interesting is that both companies had also expanded into adjacent vertical markets.

Per yesterday’s press release Ontario has a significant presence in the Healthcare space “with five of the 15 largest and three of the top six  best health systems in the U.S. as customers and actively managing more than $40 billion in receivables with its products.” CUBS has a large presence in the government sector, “serving more than 100 state and municipal government customers in 27 states.”

insideARM contacted Ontario management to ask for further insight into the transaction, and for comment on questions we believe the industry is asking.

insideARM: Every acquisition involves identifying potential synergies when combining the companies. Could you discuss the potential synergies in this acquisition?

Ontario Management:  We remain deeply committed to the ARM and healthcare markets, as well as all existing customers and prospects. We anticipate that – over time — both Ontario Systems’ and Columbia Ultimate’s ARM customer base will benefit from access to unduplicated add-on products and services. For example:

• Product & services synergy – for Columbia Ultimate customers, Ontario Systems’ product and services set contains additional offerings, including:

• A cloud-based contact management system (Contact Savvy) with hosted dialer, manual contact system, IVR and messaging capabilities
• Compliance consulting services designed by Rozanne Andersen to better learn how the newest laws and mandates are affecting a business, and determine the right way to respond
• Product & services synergy for Ontario Systems customers — Columbia Ultimate’s product and services set contains additional offerings, including several self-service portal offerings for consumers and clients.

insideARM: Is there any thought that the combined company will ultimately move to a single platform (either CUBS or FACS)?

Ontario Management: There are no plans to move groups of clients from one core platform to another. Initially, our customers should see no changes to their day-to-day experience, as there are no immediate adjustments to day-to-day leadership, account management, sales, support, or product offerings. We will continue our day-to-day operations without interruption. When any changes are planned, they will be communicated in advance to customers and the market at large.

insideARM: Do you see elements of each company’s current products that might integrate with the other company’s product?

Ontario Management: For many years, Ontario Systems has believed and invested in the power of integration. In our highly complex and regulated market, we think it gives our customers an advantage – both from a capability and from a TCO perspective. We will quickly begin work on how to bring similar levels of integration capabilities between CUBS’ existing platforms and Contact Savvy, for instance.  There are other opportunities within our product sets, as well, including web portals, compliance consulting services, and more.

insideARM: What can you tell us about the combined management organization structure?

Ontario Management: Effective immediately, Ron Fauquher remains as President & CEO of Ontario Systems and R. Fred Houston and Jim Adamson are Vice Presidents and will join Ontario Systems’ Executive Leadership Team.

Finally, A. Casey Stanley, Ontario’s Vice President, Product Management and Marketing, provided the following commentary on the transaction:

“The deal joins two accounts receivable management (ARM) market experts, both committed to client service and employee culture. While we remain deeply committed to the ARM market, a combined Ontario Systems has exciting growth potential in adjacent verticals where we hold strong brand positions.  Ontario Systems provides RCM software and services to the healthcare market, counting five of the 15 largest health systems in the U.S. as customers, actively managing more than $40 billion in receivables with its products. With 35 years in the government sector, Columbia Ultimate serves more than 100 state and municipal government customers in 27 states. We will continue aggressive investment in those high-growth markets in addition to our place in the ARM market.”

insideARM Perspective:

It was also surprising that there were no rumors of the transaction. It is a testament to management at both companies that the transaction was completed without any leaks of information about a potential acquisition.

There have been significant transactions in this space over the last several years. In October, 2010 Interactive Intelligence acquired Latitude Software. In November of 2012 FICO acquired CRS software. This transaction creates a combined company to better compete with those two large entities.  It is a positive development for the industry.