By Stuart Wilson
The global consolidation process gripping the ERP sector has cranked up another notch with the announcement that Lawson Software has tabled a US$480m all-stock bid for Intentia.
The global consolidation process gripping the enterprise resource planning (ERP) sector has cranked up another notch with the announcement that US-based Lawson Software has tabled a US$480m all-stock bid for Intentia.
“This is not a typical software consolidation,” said Richard Lawson, chairman of the board at Lawson Software. “This is a combination of equal companies that has tremendous growth potential in the enterprise software market. We are very excited about going forward as a unified organization with a strong financial position and strong balance in our customers, people, products, industry markets, and geographies.”
The combination of the two companies will create an organisation with 3,500 employees serving approximately 4,000 customers in 40 countries around the world. The terms of the transaction are expected to result in Lawson’s shareholders owning approximately 56.75% of the combined entity. The deal is expected to close by December 31st, 2005.
“This is a winning combination for shareholders, clients, and employees,” said Dr. Romesh Wadhwani, chairman of the board at Intentia. “Shareholders will benefit from the greater scale, growth and profit potential of the combined business. Customers will benefit from the superior value of the great solutions and technology that each company has developed for its target vertical markets. To help our customers with their purchasing decisions of either the Intentia or Lawson platforms or applications, we are committed to providing new releases, enhancements and support for our core products for at least five years.”
“Because there is little product and geographic overlap, the new company can retain our service and support organizations for our existing products with no disruption. We can be a single-source supplier to our customers offering them a broader range of industry-specific ERP applications. Employees will benefit from being part of a leading global company. Because there is little overlap in geographies or products, the impact on employee opportunities should be positive,” he added.
Lawson posted sales of US$364m for the year ending May 2004 while Intentia revenues totalled US$406m in calendar 2004. The combined company will specialise in serving medium and large enterprise customers with a product portfolio encompassing core ERP, performance management, supply chain and asset management applications.
The two companies claim that minimal overlap between their existing areas of product focus will mean immediate opportunities for cross-selling into the existing customer base. The combined company is expected to derive approximately 45% of its sales from EMEA, 45% from North America and 10% from Asia-Pacific.
“The mid-market needs a provider with global reach, a broad product portfolio, industry-specific solutions across multiple categories, world-class partners and staying power. In addition, the combination positions Lawson in the top tier among enterprise applications providers worldwide and creates one of the largest providers of enterprise applications for IBM environments. Intentia is among the top IBM eServer partners globally and Lawson has been a leading provider of enterprise applications for the IBM eServer platform for many years,” added Richard Lawson.
Jay Coughlan, president and CEO at Lawson has announced that he will leave the company after a transition period. Harry Debes, an executive with 20 years experience in the enterprise software market, will take up the president and CEO position on June 15th. Debes' CV includes a stint at J.D. Edwards running its Americas field operations.