Demandware announced today that it bought Tomax, a cloud-based point of sale company for approximately $75M in cash and incentives.
According to Demandware CEO Tom Ebling, the acquisition extends Demandware’s reach from eCommerce websites to the brick-and-mortar storefront. Ebling said that they were attracted to Tomax for several reasons.
First of all, like Demandware, they are cloud-based and they are built to scale to enterprise demand. Ebling told TechCrunch that Tomax is capable of processing thousands of transactions per hour. The company, which is based in Salt Lake City, Utah also includes 100 engineers with deep domain expertise, which Ebling pointed out also has great value.
Boston-based Demandware plans to keep the Salt Lake City operation going and retain all of the Tomax employees. Ebling said in the short term, the two companies will strive to provide working integration between products, and as they get more comfortable collaborating together, they will aim for deeper consolidation. Ebling admits that combining companies isn’t a simple process, but he says the two teams have already begun communicating.
Tomax fits within Demandware’s vision to be a round-trip solution for retailers where the web extends into the store and vice versa. For example, they count New Balance among their clients. Customers can go to the New Balance website, design a custom pair of sneakers and then pick them up in a store or have them delivered to their homes.
Elena Anderson, SVP for worldwide marketing at Demandware offered another example. She said, by this year, they found that free shipping at the holidays on eCommerce sites was common practice, but retailers reported that after December 19th, it failed to be an incentive. By providing the option of ordering online and picking up in the store, they found they were able to extend sales past what was once a pretty firm buying deadline, while combining that online and in-store experience.
By buying Tomax, Demandware not only provides that web-store integration, it extends its reach all the way to the cash register.
Ebling said that $15M of the $75M purchase price had been set aside as incentives to keep key Tomax personnel onboard for an extended period of time after the sale. He wouldn’t share the details of this part of the agreement, but indicated they were using monetary inducements to keep as many essential members of the Tomax team on board for as long as possible.
This marks the third acquisition for Demandware in the last year. Today’s purchase follows Mainstreet Commerce, an inventory management and fulfillment company last January and CQuotient, an analytics solution for retailers this past October.