Invensys finally bags Baan
Invensys has its prize catch, but an expected loss of $95 million for the quarter shows Baan needs major surgery.
Invensys, a manufacturing equipment maker, has finally taken over software developer Baan, but the company's future is far from secure.
Baan officials predict a loss of up to $95 million when the company's most recent quarterly results come in soon.
Analysts are gloomy. "Nobody knows what's really going to happen with Baan," said Meta Group analyst Barry Wilderman.
He's advising Baan customers to demand that they be given open access to computer code in case Invensys cannot add new software functionality quickly enough.
Meanwhile, the company continues to lose up to $1 million per day. Wilderman estimates that a turnaround of the company could take up to two years and cost $500 million.
Invensys took control of Baan in July but without picking up the number of shares that it wanted.
The company set a July 13 deadline for acquiring 95% of the shares, but settled on a lower number because of a shareholder faction that resisted its takeover price.
Invensys offered $2.65 per Baan share, valuing the company at around $700 million. Two years ago, it boasted a market capitalisation of around $10 billion.