Financial performance management software helps companies analyze profitability, price-volume trends, and other complex matters. It's also been a hot market for software vendors, with a spree of deals over the past year. Business Objects (NASDAQ:BOBJ) spent $300 million for Cartesis, SAP (NYSE:SAP) acquired OutlookSoft for an undisclosed amount, and Oracle (NASDAQ:ORCL) shelled out $3.3 billion for Hyperion. The latest deal came yesterday: Cognos (NASDAQ:COGN) agreed to purchase Applix (NASDAQ:APLX), a Motley Fool Rule Breakers pick, for $339 million.

Just a few years ago, Applix was a fairly small, meandering company. But tech veteran David Mahoney came on board as CEO and made some key strategic changes. "He cut costs, divested the customer relationship management business, and focused on financial performance management," said Ben Plummer, the vice president of worldwide marketing and strategic alliances for Applix, in a Fool interview. "It was a classic turnaround."

As a result, Applix has assembled a powerful technology offering. For example, Applix servers have the firepower to process huge amounts of data, allowing quick analysis and queries. It has become mission-critical for many of its customers.

Over the past year, Applix's revenue surged 45% to $61.2 million, and license revenue was a hefty $34.2 million. With the help of 90% gross profit margins, the company was able to post net income of $9.8 million for the past year.

In the deal, Cognos will pick up 3,000 financial performance management customers, which is a big boost to its existing customer base of 3,500. While there is about 25% overlap, Applix has about 1,500 middle-market customers, a category Cognos will need to focus on to find more growth.

The valuation for Applix looks pricey at 5.5 times revenue. Keep in mind that Hyperion sold for 4 times revenue, and the deal for Cartesis came to 2.4.

On its face, the Applix transaction looks like a nice fit for Cognos. However, there were no financial details provided, because Cognos is in the quiet period for its fiscal Q2 earnings report, which comes out on Sept. 27. Foolish investors are probably best off waiting to get more color on the deal.

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Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is currently ranked 4,172 out of more than 60,000 investors in CAPS. The Fool has a disclosure policy.