Forrester Research to buy Giga for $51.3 m

CAMBRIDGE: Forrester Research Inc., a technology research group, has said it has agreed to buy competitor Giga Information Group Inc. for $51.3 million. Forrester said it would pay $4.75 per share for the company, which it said would add to earnings in 2003, excluding charges.

That is a sharp premium to the Giga shares; it gained 192 percent, or $2.995, to close on Tuesday at $4.555. Forrester fell 36 cents, or 2.2 percent, at $15.74 on Nasdaq.

Forrester, which became well known during the Internet boom for its optimistic growth forecasts for the Web, has been hit by the downturn in technology spending in the last few years.

Giga, which was created in 1995, has fared better because a larger proportion of its sales come from information technology departments, whose budgets haven't been as hard hit as the marketing and business unit groups Forrester also sells to, said Forrester Chief Executive Officer George Colony. Colony said that after looking at buying Giga a few times in the last several years, Forrester made the move now because of price and profits.

"Three years ago they couldn't seem to make a buck," Colony said during a conference call. "I wanted to buy a company that had the profit habit." Giga has posted a profit for the last six quarters, he said.

Giga brings 900 new clients to Forrester, Colony said. Its primary competitor following the all-cash deal will be research group Gartner Inc.

W.R. Hambrecht & Co., owner of 15 percent of Giga's stock, has also agreed to tender its shares. The acquisition is expected to close at the end of February, or if a majority but less than 90 percent of Giga's outstanding shares are tendered, then during the second quarter of 2003 following a meeting of shareholders.

© Reuters