Infor, SSA Shake Up Apps Market With Merger

Two major players in the rapidly consolidating ERP software market announced marriage plans on Monday, with Infor agreeing to buy SSA Global for around $1.4 billion in cash.

The deal unites two companies that have carved out niches in the enterprise software market by acquiring other midmarket technology vendors to create broad portfolios of back-office business applications. Infor, a four-year-old, privately held company based in Atlanta, focuses on the manufacturing and distribution industries. SSA Global, headquartered in Chicago, counts Baan and Epiphany among the software lines it owns.

Both SSA Global and Infor made a habit of snapping up distressed software companies with loyal bases of legacy users. As Oracle and SAP consolidated the top tier of the ERP market, SSA Global and Infor were among the only sizable vendors left standing in the market's next tier, along with Sage Software and the recently merged Lawson and Intentia.

Infor says that buying SSA Global will make it the industry's third-largest enterprise software provider, with annual revenue of roughly $1.6 billion. The deal is squarely aimed at giving the combined company the bulk to fend off aggressive rivals like Oracle: "In a rapidly consolidating marketplace we have seen that size and scale matter," Mike Greenough, CEO of SSA Global, said in a written statement.

Infor will pay $19.50 per share in cash for SSA Global, a 25 percent premium on SSA's closing price Friday on the Nasdaq exchange. Shares of SSA (ticker symbol: SSAG) jumped 22 percent Monday to close at $19.03. Pending regulatory and shareholder approvals, the companies expect the acquisition to close by September.