Blackbaud Plans To Spend $46M To Buy Software Rival Kintera Inc.

Blackbaud Inc., a Daniel Island-based software maker, said Thursday it will buy Kintera Inc., a long-struggling rival, for $46 million in cash. The deal is expected to close in the first week of July.

Blackbaud's offer equates to $1.12 a share, a 65 percent premium over the closing price of Kintera stock Thursday on theNasdaq Stock Market. The deal was announced after trading hours.

Both companies sell software and services to help nonprofit organizations raise funds. Blackbaud long has claimed to dominate the market and said it now has 19,000 customers. Kintera, a San Diego-based company, has 4,000 customers. However, Kintera has had little luck generating income for itself.

The company has lost money in every quarter since its 2000 inception and had accumulated a $148 million deficit by the end of March. Its stock price has fallen steadily from an all-time high of $17.29 a share in April 2004 to a recent range of less than of 70 cents a share. For the quarter ended March 31, Kintera posted a $4.3 million loss as revenue dropped 17 percent from a year earlier. In the two years ended last summer, Kintera laid off about half of its 550- person work force. Its former chief executive, Harry Gruber, a doctor who co-founded the company, resigned in May of last year.

Last week, Kintera was on the verge of being delisted by Nasdaq because its total stockholders' equity dropped below the required $10 million threshold. Still, Kintera counts some large charities as clients, including the American Lung Association, Big Brothers Big Sisters of America and the Lance Armstrong Foundation. Kintera collected $44.9 million in revenue last year.

Blackbaud CEO Marc Chardon said Kintera's products that help raise money online will buttress Blackbaud's suite of offerings. Blackbaud has a similar product, but Chardon said the two companies serve different segments of the online market. "Our core capabilities are complementary," he said in a statement.