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

The move is part of Siebel's strategy to provide a broader range of front-office applications with its customer relationship management (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 center 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, which is based in Natick, Mass. 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.

The IDG News Service is a Network World affiliate.