Best Software's Parent To Buy Accpac

Best Software on Tuesday announced that its U.K.-based parent company, Sage Group, has agreed to pay Computer Associates International $110 million in cash for its stake in Accpac International. After expenses, CA will recognize $88 million. Subject to regulatory approval, the deal is expected to close by the end of February.

Both Best, Irvine, Calif., and Accpac, Pleasanton, Calif., offer business software aimed at small- and midsize-business customers. Best's portfolio includes stand-alone applications, such as its SalesLogix CRM software, as well as its MAS 90, MAS 200 and MAS 500 back-office suites for capabilities that include accounting, inventory management and wholesale distribution. Accpac's end-to-end product line includes applications for accounting, CRM, human resources, warehouse management, manufacturing and point-of-sale. Accpac's products can all be delivered as hosted services over the Internet, thereby rounding out Best's offerings.

"We are very excited by [Accpac's hosted CRM solution] because we had to either build it or buy it," said Ron Verni, CEO of Best. "The market and our partners have been telling us that we needed a hosted product for the CRM side."

In addition to offering hosted options, Accpac's software can run on either Linux or Windows and work with variety of databases, such as Microsoft's SQL Server and IBM's DB2.

"This [acquisition] is good for Best because it gives them the whole freedom of choice that Best has been talking about," said Alex Solomon, co-president of Net@Work, a New York-based solution provider that represents both Best's and Accpac's product lines. "Now Best can tell customers they can have hosted or not-hosted applications. Database? You pick it. And you can pick the OS. This puts Best on an equal footing, if not better than Microsoft."

Choosing to focus its efforts solely on management software, CA has been shedding its business applications products since early 2002. In December 2002, CA announced its intentions to spin off Accpac with an initial public offering. That never happened because of "unfavorable market conditions," a CA spokesperson said. "We decided that a sale to Sage, which has Best Software in the U.S., was the best way to serve [Accpac's] customers and provide opportunities for Accpac employees," he said.

Accpac is expected to bring more than 540,000 SMB customers to Best, which already has more than 1.8 million customers in the United States. The combined company will have a channel network of more than 13,600 partners.

Verni said the Accpac acquisition enables the company to expand into Canada and Asia and strengthen its presence in Australia and South Africa. Verni and Accpac CEO David Hood said they expect Accpac to operate as a separate business unit within Best. Hood's role in the new company will be announced after the acquisition is completed.

MATT VILLANO contributed to this article.