Infor’s US$1.4bn buys SSA Global

The consolidation of the enterprise software market continues apace with US firm Infor swooping last week to capture SSA Global Technologies in a deal worth US$1.4billion.

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By  Diana Milne Published  May 21, 2006

The consolidation of the enterprise software market continues apace with US firm Infor swooping last week to capture SSA Global Technologies in a deal worth US$1.4billion. The move will make it the third largest player in the industry, behind heavyweights SAP and Oracle. While hardly a household name, Infor — formerly known as Agilisys — has built up a formidable portfolio of products, having acquired all or parts of such firms as Geac Computer Corp, Datastream Systems and Formation Systems. SSA Global has itself been on a shopping spree in recent years, with purchases including Baan in 2003 and customer relationship management (CRM) software firm Epiphany last year. The combined company will now leapfrog rivals into the number three space in the enterprise software market. “With this acquisition Infor will become the third largest enterprise software provider in the industry with approximately US$1.6 billion in revenue,” said Jim Schaper, Infor’s chairman and CEO, in a statement announcing the deal. “In a rapidly consolidating market, we have seen that size and scale matter,” said Mike Greenough, CEO of SSA Global, in the same statement. “This transaction brings value to all of our key stakeholders... our investors, our customers and our employees,” he added. Initial industry reaction was less enthusiastic last week, with analyst firm AMR Research describing the deal as “a bold but risky move” for Infor — and one which could cause problems for the combined customer base. “We expect the 37,000 joint customers of SSA and Infor to receive this news with very mixed emotions,” AMR analysts Judy Sweeney and Nigel Montgomery wrote in an online advisory. “Any new acquisition creates some disruption to the customer base,” the advisory continued. “This acquisition, significant enough to dilute senior management attention, puts at risk development plans and strategies of both customer sets,” it went on to note. SSA Global has experienced mixed fortunes in the Middle East in the past couple of years, with the company recently announcing plans to increase its channel presence here in the region, after what executives admitted has been a period of low visibility. Earlier this year SSA Global lost a customer, Saudi Formald- ehyde Chemical Company Ltd, which it had inherited from Baan, over support issues (see IT Weekly 4 – 10 March 2006). Pankaj Pandit, project manager at SFCCL, said at the time that the support available “was not up to the mark” and also questioned the long-term future of the Baan solution. According to AMR Research, Infor now faces “the hard work” of rationalising all the different product lines of the two companies, some of which it sees as complementary “but some that are competing and overlapping as well.” Tariq Saoud, director of the supply chain solutions division at SSA Global reseller Span, said the move was a very positive one. “For SSA it will give them exposure to a much bigger and different marketplace,” he claimed. “I hope that existing customers will react positively to this. It will give them greater security being part of a larger company,” he added. However, Phil Blower, sales director for SAP Arabia said he did not believe the acquisition would have any impact on the Middle East enterprise market, claiming that Baan SSA has less than 2% regional market share. “I never come across them (SSA or Infor) and they are never one of the shortlisted companies we come up against in decisions,” he said.

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