Bedford, MASS. —MRO Software vowed to seek negotiations to acquire rival Datastream Systems even after its second purchase offer was rejected in January.

Both companies provide plant asset management software, and MRO Software's revenues are about twice Datastream's, at $185.5 million last year. MRO Software CEO Chip Drapeau said combining the firms continues to make "compelling" sense, and he vowed to open negotiations.

"This isn't about us wanting to be a slightly bigger company in the traditional plant maintenance space," Drapeau told ID. "This is about being a launching pad for the expansion of more technologies for asset-intensive companies."

Datastream Systems said it wants to remain independent, despite recent steep losses.

MRO Software offered $6 per share in December, which consisted of $1 in cash and $5 in MRO Software common stock.

MRO Software is best known for its MAXIMO® software, which helps manufacturing plants plan and track MRO items. The firm says that results in improved equipment uptime, better maintenance planning and scheduling, and reduced costs. Datastream Systems is known for Datastream 7i, its enterprise asset management software and its iProcure integrated procurement network.

Despite Datastream's rebuff of his company's offer in early January, Drapeau insisted it was still a good fit.

"The fundamentals from a market perspective are that the companies both have large customer bases, and both are developing new technologies to serve them," he said. "They know plants, they know how asset intensive companies operate, they have a good distribution channel," he said.

Investors also reacted warmly to the prospect of combining the two companies, Drapeau said, noting some efficiencies that would result. He called the proposed transaction "timely, based on the pronounced shifts to pure Web-based applications and the market's desire for a clear choice for strategic MRO and industrial supplier enablement."

However, Datastream Systems believes it is worth more than the offering price and that the company is rebounding after losing $11.9 million last fall. Its stock hit a low of $2.20 per share in October, and was trading at about $6 a share at the beginning of the year. At press time, the company said expected license revenue for its fourth quarter would exceed estimates by 25 percent.

Datastream Systems chairman Larry Blackwell called MRO Software's common stock "extremely volatile" as he announced his company's intentions in January. After reaching a low of $6.75 per share in April, 2001, MRO Software was trading at a high of about $25 in December.

Blackwell said directors decided to remain independent after reviewing Datastream's "strategic plan, the investments we have made and the momentum we are building."