Geac goes for $1bn, falls into Infor’s acquisitive arms

Another of the mighty has fallen: Geac, which acquired JBA in 1999, has bowed to the inevitable and accepted a $1bn friendly takeover bid by US private equity firm Golden Gate Capital – which also owns rival Infor Global Solutions. So it is that Infor will now get the IBM iSeries-based System 21 to add to its already swollen ERP (and associated software) portfolio – plus its much vaunted Aurora ERP upgrade, mostly aimed at the fashion and textiles industries. It will also get Geac’s Streamline, Runtime, RatioPlan and Management Data suites. Size matters in the IT industry: if you’re not big enough, you don’t get the big deals so you can’t finance development and the downward spiral can be rapid. So it was for Geac which, following the loss of its acquisition target Mapics in March (paradoxically to none other than Golden Gate and Infor again), found itself facing life as an acquiree instead of acquirer. Geac CEO Charles Jones simply had to concede that he wasn’t going to find a suitor capable of turning round declining revenues and profitability – 3% and 16% respectively for Q1 2005/6, year on year. Aurora is apparently going down well with users – but on its own it wasn’t ever going to be enough to make the difference. The deal with Golden Gate is thus good for Geac’s shareholders – a 27% premium on the share price at the time (immediately hiked in response). And no the face of it, it looks good for employees – while the ERP teams will move to Infor, a new company will be set up for the fest of the organization, which is likely to require considerable staffing. Importantly, it’s also likely to be good for Geac users, particularly on the System 21 side. Infor has made a reputation for itself, in its three short years in the current incarnation, as a highly acquisitive firm very focused not only on buying companies with growth potential, nor just on manufacturing and distribution, but on long term organic growth through innovation and technology re-use geared to users’ real requirements. And that means users of all its current systems – Mapics XA on iSeries, Syteline on .Net, the Visual systems (formerly Lilly) also on .Net, the Infor original ERP systems and so on. The deal, according to Infor vice president of global marketing Rick Parker is absolutely no sunsetting of existing systems, but the promise of support and advancement incrementally at any time, with new technology modules reversed into the existing systems. Says Parker: “It won’t be any different for Geac/JBA users.” And with 2,300 employees, globalised products, offices in 47 countries plus 18,000 customers in 70 countries – and a billing as the largest ERP software provider exclusively in manufacturing and distribution, there’s a lot of support. I have to tell you: it doesn’t get better than that.