Blackbaud acquires eTapestry for $24.8M

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In a move that reflects the growing importance of software-as-a-service (SAAS) to the nonprofit sector, Blackbaud Inc., which designs software for nonprofit organizations, has acquired eTapestry for $24.8 million.

The deal includes an additional amount of up to $1.5 million under a two-year stock-based performance incentive arrangement.

Founded in 1999, eTapestry, Indianapolis, IN, developed one of the SAAS offerings built specifically for nonprofits. The company's flagship product is an on-demand fundraising solution that targets smaller and midsize organizations interested in an easy-to-deploy and relatively low-cost product.

It has more than 3,000 customers, and donor records range from several hundred per organization to more than 300,000.

In addition to providing Blackbaud, Charleston, SC, with a fundraising solution that addresses small and midsize nonprofits, a market it was not actively pursuing previously, the move positions Blackbaud to take advantage of future growth in SAAS.

"From a long-term perspective, we believe that software-as-a-service offerings in the nonprofit sector will grow in importance," Marc Chardon, CEO of Blackbaud, in a statement. "With the acquisition of eTapestry, we have positioned Blackbaud to participate in an early-stage, high-growth trend with a company that has a proven solution, customer base and growth track record."

ETapestry will continue operations as a wholly owned subsidiary in Indianapolis. The 85-person company will continue to be led by Jay Love, co-founder and CEO of eTapestry.

John Moore, eTapestry's co-founder/VP of development, and Steve Rusche, eTapestry's co-founder/COO, both plan on continuing in their current roles with eTapestry as it becomes part of Blackbaud.

On August 6, Blackbaud reported that its revenue totaled $64 million for the quarter ended June 30, an increase of 32 percent compared with the second quarter of 2006.

License revenue increased 19 percent for a total of $11 million, subscriptions increased 125 percent to $5.5 million, services revenue increased 42 percent to $22.2 million, and maintenance revenue increased 16 percent to $23.2 million, compared with the same period in 2006.

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