Siebel Systems has agreed to acquire edocs, a maker of e-billing and customer self-service applications, for US$115 million.

The move is part of Siebel's strategy to provide a broader range of front office applications with its CRM suite, the company said. Edocs products are supposed to help businesses cut costs by reducing the use of paper and letting customers use more self-service channels such as the Web and e-mail.

Combining the two companies' products should help customers reduce call centre costs and retain clients, it said. Edocs' customers include British Telecom, Harvard Pilgrim Healthcare, Toyota Financial Services and Verizon Wireless, Siebel said.

Siebel will initially pay $115 million in cash for the smaller company. Further payments may follow if the products reach certain revenue targets, Siebel said. The deal is expected to close early next year pending regulatory approval.

The transaction is likely to reduce Siebel's first-quarter 2005 earnings by about $0.01 per share, the company said.