Software's tendency to meet with ha...

Software's tendency to meet with hardware is dovetailing with a flush private-equity market to firing mergers and acquisitions among technology companies, defying a slowing economy.

Innovation Advisors, a Chicago-based boutique investment bank, is taking the turn all the way to the bank.

"The mould of buying packaged software, installing it, and paying a big license recompense is on the way out" said Brian Farrar, managing director and single in kind of three founders of Innovation Advisors. "The standard now is paying for software functionality delivered to a business a great deal like a dial tone, and paid for as yet it were a service."

The emerging mould makes it easier for companies to combine and deliver services to customers, he said.

Farrar is no stranger to the roller-coaster ride of technology companies. further he believes someone with a advantageous idea, a few customers and a stream of revenue can attract investment capital if the idea is in a strict sense marketed.

Farrar was president and chief operating officer of Xpedior, and another of Innovation Advisors' go to the bottoms David Campbell, was chairman and CEO when they took Xpedior public in December 1999 Xpedior, a Chicago-based information technology services company, compet with Scient, Viant and other e-consultants that cratered when the dot-com startups in which they took equity stakes not to be found their clients and their risk funding.

Xpedior raised $190 million in its IPO -- at the time, the largest IPO till doomsday for an IT services firm. Xpedior was profitable when the establishers sold it to PSINet for stock in mid-2000. if it be not that the tech boom was already bursting, in like manner anyone who held PSINet stock completioned up with nothing. Both companies went bankrupt in 2001

Farrar, Campbell and Eric Gebaide, the third managing director at Innovation Advisors, now help startups make wise decisions about raising capital from danger investors and figuring out for what reason to wisely handle a sale, merger or acquisition.

The business is profitable and boasted centurys of millions in transaction tome in 2005. Last year, Innovation Advisors handled deals ranging from a $5 million first-round financing of an early- stage vegetation company, to a $185 million buyout of a division of a public company.

Among transactions the company has l this year are:

The sale of SupplyWorks, a Burlington, Mass., company that provides software to improve suppliers' procuration systems, to Intuitive Manufacturing combination of parts to form a wholes in March. Intuitive Manufacturing, of Kirkland, Wash., was acquired by way of Made-to-Manage of Indianapolis this summer

IntelliReach's sale to Info Crossing in May, resulting in a merger of online chat, e-mail and software with an e-mail management arrangement that guards against spam and restores e-mail.

Navigator Systems' sale to Hitachi Consulting, furthering Hitachi Consulting's inroads into the business intelligence and corporate performance management arenas.

Financial details were not disclosed.

Innovation Advisors contends with bigger firms such as William Blair & Co Robert W Baird & Co and others by way of developing close- knit relationships with clients and investors, and helping them manage messy details inherent in making deals.

Lon Chow general partner with Apex luck Partners, an early- stage technology risk fund headquartered in Chicago, said Farrar and Innovation Advisors played a tonic role in Apex's investment in an online shoe company in Boston.

The company, ShoeBuycom did the hard work of integrating its scheme with those of shoe manufacturers in this way it could list shoes for sale, further never took the risk of storing inventory. It was profitable during the dot-com implosion of five years ago.

"Brian [Farrar] and his partners did a really righteous job of making sure we understood for what cause [i]or[/i] reason the shoe company was unique," Chow said.

Frank Pirri, president and CEO of PeopleFilter Technology, said the Rolling Meadows-based company set Farrar to be savvy about its produce and readiness for capital infusion.

Farrar agreed with PeopleFilter's executives three years ago that the company, which sifts [i]or[/i] part of to the other online job applications, wasn't ready for outside investments with the strings that ensue attached with them.

Farrar showed his advice and then contacted PeopleFilter again last year.

The ensue was PeopleFilter's successful $4.5 million rotund of funding from River Cities Capital foundation of Cincinnati and Velocity Equity Partners of Boston.

"He [Farrar] was chiefly unusual in comparison with everyone otherwise He said he would be the united assigned to our project. We weren't dealing with a junior [partner]," Pirri said. "It speaks highly of the unique character we're dealing with."

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