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Elsevier to Sell MDL to Symyx Technologies
by
Posted On August 20, 2007
The big news splash last March about the purchase of Beilstein by Elsevier, Inc. (www.elsevier.com) has been trumped by the recent announcement that Elsevier will be selling MDL Information Systems, Inc.(www.mdl.com)—but not Beilstein—to Symyx Technologies, Inc. (www.symyx.com) for $123 million in cash. The transaction is expected to close during Q4 2007 and is subject to the usual closing conditions.  It was fairly obvious that Elsevier acquired Beilstein in order to integrate it into MDL DiscoveryGate, a suite of chemical databases—the conduit for the acquisition was MDL, previously acquiredby Elsevier. (See my NewsBreak on the Beilstein acquisition at http://newsbreaks.infotoday.com/nbReader.asp?ArticleId=35652.)  MDL (under a variety of managements) has a long track record on providing databases primarily involving chemical structures. Symyx (largely unknown to me before last week) is one of the leaders in the electronic notebook and chemical informatics markets. 

According to some observers (for example, Antony Williams,of ChemZoo, whose blog is at www.chemspider.com/blog), rumors within the industry had indicated that MDL was being offered for sale. In Williams'opinion, the cheminformatics market continues to undergo consolidation, with Symyx previously acquiring IntelliChem and Synthematix.

Some speculation on the impact of the transaction has already appeared, so I contacted company representatives to clarify the details. Teresa Thuruthiyil, vice president, Investor and Public Relations for Symyx, graciously answered my questions, primarily aimed at the impact upon users (quoted below)

REB: From the news release, all content acquired by Elsevier with its earlier purchase of MDL will be retained by Elsevier. Are there any exceptions?

TT: Elsevier retains Beilstein, PharmaPendium, Gmelin, and the Patent Chemistry Database. As you know, Symyx and Elsevier have committed to preserving the user experience and have established a strategic relationship to assure access to the content.

REB: What are the probable effects on users of Symyx or MDL/Elsevier products, services, and software, especially on existing user contracts?

TT: There is an ongoing relationship between Symyx and Elsevier, effectively a strategic service-level agreement that stems from a mutual commitment to enable high-quality, uninterrupted user experience. With the combination of MDL and Symyx Software, customers will benefit from having a range of offerings that operate as standalone or integrated workflows,including ELN software based on the kind of research being conducted, popular drawing packages, and execution and analysis applications. Symyx and MDL will continue to integrate with other lab packages and systems with the goal of enabling everything in our customers' laboratories to work cohesively.

REB: How about other aspects important to users: Customer service? User meetings? User feedback?

TT: Each of these items is important to us and to the communities and customers of both Symyx and MDL. Plans are in progress at this time. This deal provides a terrific opportunity to offer existing and potential MDL and Symyx customers with additional content and capabilities all with the same goal—better scientific decision-making and greater R&D productivity.

REB: And what about the MDL and Symyx staffs—retention and reorganization of staff? (Tough one, I know, but the question will be asked.)

TT: Symyx purchased MDL for its product, people, assets,customers, and technology and will invest to help meet customers' needs. The two companies are in the process of learning more about one another at thistime and we have not made any firm plans yet regarding products or organization.

 

I also had a conference call with Timothy Hoctor, director,Elsevier Chem/Pharma Database Sales, and Michiel Kolman, managing director,Elsevier Information Systems GmbH. They confirmed the retention by Elsevier of the databases mentioned, with the addition of xPharm. The MDL ISIS (Integrated Scientific Information System) chemical structure databases and systems go with MDL. Customer contracts are with Elsevier/MDL GmbH and will remain in place.New customer services will be instituted for Elsevier. Since the sales force is in place, customer feedback will be gathered through both the sales force and customer service. All associated staff will be retained.

One vendor pointed out that for the past few years MDL has produced the RTECS database (Registry of Toxic Effects of Chemical Substances)under license to CDC/NIOSH. Although Symyx won't announce plans for specific products until the deal is closed, the vendor was able to verify through contacts at MDL that the arrangement will continue.

It would seem to the casual observer that, quite possibly,this is the better partition of assets—databases remaining with the organization that can better vend them, and software applications going with one of the leaders in the laboratory informatics market. Other observers are less benign and are of the opinion that there are limits to the markets for products and services provided by Symyx and MDL, and that Elsevier decided to optimize profits by bailing out of the marketing expenses.

For much more detail about the continually changing laboratory informatics market, see the blog by Williams, link cited above. He claims to have predicted the sale of MDL (but not to whom), analyzes the market and the players, and predicts who will be the next to be acquired. He also promises to keep watching (and hopefully reporting on) this changing market.

Several people have pointed out that at least two Symyx executives were formerly at MDL, and there are probably other MDL alumni in the organization. As a matter of interest, both Symyx and Elsevier have booths at the Chemical Exposition at the American Chemical Society National Meeting in Boston the week of August 19. Maybe the two sets of sales and marketing personnel can get better acquainted.

These are interesting times indeed for these market sectors. I've often quoted an old Chinese curse, "May you live in interesting times."Others have told me they've heard it as a Buddhist blessing. I guess we—the observers, customers, and users—will have to wait a while to see what these developments are, curse or blessing.


Bob Buntrock is a (semi)retired chemist and informationspecialist living in glorious Maine. A veteran of the online revolution and wars, he reviews books and writes on a number of topics.


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