SSA GT acquires Interbiz manufacturing enterprise IT from CA: pledges ongoing support

In a surprise announcement yesterday SSA GT, the BPCS enterprise software vendor, revealed that it had acquired all of Computer Associates’ interBiz ERP, warehouse management and supply chain management packaged IT, and its people – for cash. Included in the deal are all the products of what were for a time MK (Unix and NT-based ERP) and Acacia (IBM iSeries (AS/400)) systems and the more recent interBiz intelligent agent (neugent technology) supply chain and transportation and logistics technologies. Main names now with SSA GT are interBiz Logistics, Online and Reports, as well as its KBM (knowledge based management), the old Manman pre-ERP suite, Masterpiece/Net and HRMS, and MK Logistics, MK Manufacturing, PRMS and CA’s Warehouse BOSS WMS. Beyond the products, SSA GT gets a substantial customer base – around 4,400 customers across 27 countries. The combined company will serve more than 9,000 longstanding companies in some 90 countries from 70 offices world-wide, an impressive total putting it much higher up the enterprise software big boys league. Mike Greenough, president, chairman and CEO of SSA GT, says the deal has been in the making for four months following due diligence. “I absolutely saw the synergies,” he says. Initially at least, all of interBiz’s 725 existing employees will be brought into the SSA GT fold, although Greenough concedes that the next very few months will see “substantial” reductions as rationalisation and right-sizing are implemented – which he expects to complete by July. Meanwhile, on the product front he says existing customers need have no fear of immediate rationalisation. “We see value in the existing brands… Some of have got better legs than others [but] we’ll continue to invest… We’ll be extending the life of their systems as long as it’s feasible.” The reality will undoubtedly be somewhat less rosy: supporting, developing and integrating a sizeable bunch of (some legacy) systems like this, where there is inevitable overlap as well as extension, is rarely straightforward. Greenough already says that where, for example, the Unix technology is particularly old, users will be offered modern systems in the form of BPCS and Max. But he adds: “We want to assure customers that we are not going to sunset their products. We want them to stick around and move up with us when they are ready. Remember we have built our BPCS XP [enterprise application integration] layer so when they want to do so we are ready to help them.” He says the next few months will see SSA GT working to bring its new customer base into the fold of its ‘Global Guide Groups’ which help to determine the sectorial direction of the firm’s IT R&D. The likelihood is that they’ll like what they find. And he suggests that with additional revenues from the interBiz side and its growing Max empire (particularly in Eastern Europe, the Far East and South Africa), spending on R&D will be expanded. The result will be a strengthening of SSA GT’s offerings and support facilities in its main markets – automotive, FMCG (fast moving consumer goods, including food, beverage and electronics), general manufacturing and pharmaceuticals. “This acquisition provides SSA GT with new market share... This ensures we can provide customers with ever increasing functionality to meet their specific industry challenges.” CA president and CEO Sanjay Kumar says: “CA’s strategy is to focus on our industry leading positions in enterprise management, security, storage, application development and integration, business intelligence and portals.” It’s focus is now publicly where it has been for some time – on IT that manages aspects of e-business: Unicenter for infrastructure management, BrightStor for storage, eTrust for security, CleverPath for portal and business intelligence, AllFusion for application life cycle management, Advantage for application development, and its Jasmine database technology. “The interBiz offerings are superb solutions for the customer base served by SSA Global Technologies. We believe this agreement will ensure the continued development and evolution of the interBiz products and provide existing interBiz customers with the best long-term support and technology roadmap. We will work closely with SSA Global Technologies to ensure a smooth transition for our customers and employees.” There’s no denying it’s an extraordinary turnaround for SSA GT, a firm that only escaped the ravages of bankruptcy just over two years ago, initially under venture capital company Gores but latterly Cerberus. SSA GT has been working hard to rebuild its credibility ever since, and just nine months ago bought Max International from ICL when its Fujitsu (and thus the much larger Glovia ERP) parentage made Max ownership no longer sensible. But buying Max was one thing. To have bought an organisation as big as interBiz which, although clearly losing money, includes more than 700 people, wide ranging global support facilities, CA technology and a considerable armoury of applications, albeit mostly under-invested and ageing, is an entirely different matter. The cash sum has not been disclosed, but estimates in the region of around $80—100 million will not be far off the mark, which is low but probably realistic given the well know issues in integrating products and organisations, as well as the inevitable severance liabilities. Nevertheless, since Greenough says the question his company continually faces is not about its technology, but its financial viability, this move ought to put paid to any worries. Greenough: “In the first six months of our fiscal year, we have experienced solid growth in a tough market, generated stellar profits and signed more than 750 contracts. We have proven our ability to deliver on our strategy and are now planning for the long term,” he says.