Infor Buys SSA Global

May 16, 2006 from AMR Research - "This is a bold but risky move by Infor. There has not been a successful consolidator vendor in the software market to date; just look at Geac and Computer Associates...

The combined companies represent $1.6B in revenue. Infor is expected to pay $19.50 a share for SSA, a 25% premium over Friday’s closing numbers. This all-cash deal is expected to close in the next 90 to 100 days, assuming the SEC doesn’t get involved. We expect the 37,000 joint customers of SSA and Infor to receive this news with very mixed emotions. Even though SSA had to incorporate several acquisitions itself, it did a better job of rolling out an architectural platform and communicating its long-term development plans than Infor did. Any new acquisition creates some disruption to the customer base. This acquisition, significant enough to dilute senior management attention, puts at risk development plans and strategies of both customer sets.

The hard work will be the rationalization of a mix of supply chain and ERP products with the combined SSA and Infor. Infor now owns the former BPCS, Baan, Prism, Protean, Infinium, BRAIN, SCT, Lilly, and MAPICS ERP products. In addition, its supply chain products include EXE, NxTrend, daly.commerce, and Mercia. Finally, add to those products an asset management product from Datastream, and you have some product lines that are complementary, but some that are competing and overlapping as well."

180 View - Infor has acquired a hodge podge of systems. Although some of them are highly regarded, questions remain about their future. Unless Infor dispels the concerns, the real winners will be Infor's competitors who pick up new clients unsatisfied with the new owners.