Back in 2001, Concur Technologies, Inc., (NASDAQ: CNQR) hit a low of 31 cents per share. At that time, investors had lost all confidence in the Internet. What's more, Concur was in an un-sexy space; that is, a provider of software to help companies with travel expenses.But the company's CEO, Steve Singh, was still a believer and thought the market opportunity was huge.
Well, as of now, things are starting to pay off. In fact, this week, Concur announced that it received a $251 million strategic investment from American Express (NYSE: AXP) at $39.25 per share. There is also a warrant to purchase an additional 1.28 million share (see more of today's earnings news).
No doubt, this is a big validator – and should be a major boost for Concur's business. Essentially, the parties have agreed to an exclusive marketing arrangement. Concur will promote American Express' Corporate Cards. Next, American Express will promote Concur's Expense offering to its massive customer footprint.
So does this mean that Concur wants to ultimately sell out? Perhaps so. But, according to Singh, he thinks Concur can reach 40,000 to 50,000 customers. And, in light of its recurring subscription model, the operating leverage and profitability could be substantial.
What's more, Concur reported its fiscal Q3 results yesterday. Revenues spiked 65% to $54.9 million and profits came to $4.5 million or $0.09 per share. And, going forward, Concur expects to generate profits of 32 cents per share with revenues of $214 million.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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