"Integration of MindSolve's technology will be completed in the first half of 2007", Keith Smith, SumTotal Systems Vice President Sales EMEA, said in an interview with CHECKpoint eLearning at ONLINE EDUCA Berlin.

"MindSolve has a strong technology for analyzing employee strength, creating and managing succession plans, aligning goals, as well as appraising performance and evaluation compensation", explained Smith. SumTotal now has valuable opportunities both for the pure-play market as well as for the integrated suite segment. Today many customers prefer a best-of-breed solution for learning and talent management instead of integrating these management processes into their ERP systems."

Analysts unanimously appreciate the acquisition. "SumTotal has acquired a proven, best-of-breed solution from which SumTotal customers can benefit immediately," said Josh Bersin, president and founder of Bersin & Associates. "We believe that performance management solutions are becoming the core of integrated talent management."

Gartner Analyst James Holincheck stated that SumTotal Systems gains a strong talent management offering, including eLearning, employee performance management, succession management, and compensation management applications.

Under the terms of the transaction, MindSolve shareholders will receive approximately $5.2 million in cash along with 925,000 shares of SumTotal common stock. The company will also incur additional cash obligations due to deal-related and retention expenses of approximately $1.5 million.

According to The Yankee Group, the market for talent management software - which deals with employee learning, performance, compensation and recruitment - will expand "at a compound annual growth rate of seventeen percent". Researchers expect this market to be worth approximately $2 billion by 2008.