Enterprise Resource Planning (ERP) software companies Infor and Lawson Software are poised to bring to market a new, integrated ERP software suite in the wake of a $2 billion acquisition of Lawson by San Francisco private equity giant Golden Gate Capital and Infor.
The St. Paul, Minn. headquartered Lawson said its board of directors unanimously approved an $11.25 per share buyout by GGC Software Holdings, Inc., an affiliate of Golden Gate Capital, and Infor. Lawson's board, which holds nine percent of the shares, agreed to vote their shares in favor of the deal.
Lawson said the $11.25 per share offer represents a premium of approximately 14 percent to Lawson's closing share price on March 7, the last trading day prior to news reports speculating about a potential deal and a 35 percent premium to Lawson's average closing share price for the 52 week period prior to that.
Lawson Software shares were down eight percent or 99 cents to $11.13 in midday trading Tuesday.
The deal comes with ERP software makers scrambling to adapt their offerings to the cloud computing market. SAP, for example, has launched a massive solution provider effort around its SAP Business ByDesign Software-as-a-Service (SaaS) application. And Microsoft recently announced that it is developing cloud computing versions of its Microsoft Dynamics ERP applications.
Golden Gate and Infor said the the deal will result in a set of industry-specific applications serving more than 75,000 customers in vertical markets such as health care, public sector, manufacturing and distribution.
The deal represents a high stakes bid by Golden Gate and Infor to take on ERP giants such as SAP and Oracle. Infor began its makeover by hiring former Oracle President Charles Phillips last October as CEO.
Phillips promised that Infor Lawson combination will deliver a rich, integrated enterprise application suite that will "challenge convention."
"After the transaction closes, we plan to integrate many of the applications as soon after closing as possible, facilitated by a standards-based approach and the fact that both companies' applications are already service-enabled," said Phillips. "We also plan to innovate and change how customers deploy, use, and upgrade enterprise applications."
Peter Illari, vice president of Domain Implementation Services, an SAP partner based in Wyomissing, Pa., said Infor-Lawson have old technology that simply can not measure up to SAP Business ByDesign.
"Infor is buying an old wagon," he said. "They are going to have a hard time competing against companies like mine with stellar new technology from SAP. SAP has invested $1.5 billion in Business ByDesign. It's not some old legacy product that has been around a long time."
SAP Business ByDesign puts all of the enterprise ERP muscle supporting multiple currencies in an on-demand, Software-as-a Service product, said Illari.
"Good luck," said Illari in regard to Infor-Lawson's chances of mounting an ERP software offensive against the likes of SAP. "It is going to take more than some old technology. The world is changing. Smaller businesses now are becoming more globally focused. We are dealing with clients that have 10 employees buying product in China and the Far East that need support for multiple currencies and multiple languages."
Golden Gate Capital said the transaction is expected to close in the third quarter.