posted on 3/14/2011 10:45:28 AM
In yet another sign of the changing times in the ERP market, acquisitive software provider Infor offers to buy mid-market ERP vendor Lawson Software, though no deal has yet been reached.
Enterprise resource planning customers may soon have one fewer option for software purchases, as the ERP market continues its years-long consolidation trend. Late in the day on Friday, mid-market ERP specialist Lawson Software announced that ERP heavyweight Infor Global Solutions had offered $11.25 a share, or approximately $1.84 billion, to take over the company.
“The parties are engaged in discussions regarding this proposal,” Lawson said in a statement. “However, there can be no assurance that any agreement will be reached.”
Lawson said the offer was unsolicited, and that following the Infor proposal Lawson had hired Barclays Capital to advise Lawson of its strategic options.
The proposal indicates that Infor is “willing to acquire well-run software companies,” R “Ray” Wang, CEO of Constellation Research, told Managing Automation today. Should the deal close, he said, Lawson’s prowess in human resources software would represent “a great cross-sell into Infor's existing customer base.” That said, he cautions that the deal may not be in Lawson’s best interest. “Lawson's core business has been rebuilt,” he said in an email exchange. “[CEO] Harry Debes and his management team have done a great job rebuilding the team and their customers are just about to reap the benefits of their investment… Moving to Infor may give the customers better economies of scale in the long term, but Lawson is big enough on its own right now to survive as an independent entity.”
Yvonne Genovese, an analyst with Gartner Research, echoed Wang’s point. “Lawson is doing OK as an independent company,” she told MA. “They’re a good alterative to some of the big [ERP] guys.” She also said an Infor takeover could hamper investment in Lawson’s products, since Infor is spread thin across a crowded portfolio. “We haven’t seen lots of new things come out of the companies they’ve acquired in the past,” Genovese noted.
Like its larger ERP rival Oracle, Infor has amassed a sizable software portfolio and customer base with the help of numerous acquisitions, among them ERP providers Baan, GEAC, SSA, and Mapics. The private company has done so with the backing of its primary investor, Golden Gate Capital, a San Francisco-based private equity firm.
Former Infor CEO Jim Schaper helped steer the company through a number of the acquisitions. An armistice came in 2007, when Schaper told Managing Automation that the company would hold off on buyouts for a time. Infor has since resumed its acquisitive ways, adding SoftBrands and Bridgelogix to its stable. In October 2010, Infor replaced Schaper with Charles Phillips, an ex-Oracle president who had overseen a bevy of acquisitions in his time in Redwood Shores.
The past year was a busy one for Lawson. The company announced a cloud-based version of its ERP software and came under pressure from major shareholder Carl Icahn, a so-called activist investor, to explore strategic options. Icahn, who owns more than 10% of Lawson, is known for taking significant positions in public companies and then leveraging his stake to foment change in management and/or ownership.
Shares of Lawson’s stock had been trading at around $10 last week. When news came mid-week, via a Reuters story, that Lawson had hired Barclays as an advisor for a possible sale, shares jumped above $11.
Lawson is no stranger to takeover talk. Back in 2008, the company denied it was seeking a buyer. At the time, Debes told Managing Automation, "I don't know if we are targets, but we aren't packing the company for sale."