Private equity firm Golden Gate Capital announced Monday it intends to acquire Geac in an all-cash transaction valued at about $1 billion, or $11.10 a share.
Geac Computer Corp., based in Waltham, Mass., develops ERP (Enterprise Resource Planning) software geared toward a number of different vertical markets, including manufacturing, government, financial services, health care and retail.
Golden Gate, based in San Francisco, has a distinctive approach to acquiring technology companies: It combines like assets that can grow much faster together than they would individually, according to David Dominick, managing director of Golden Gate Capital. In this instance, Golden Gate intends to break Geac into two separate entities and fold them into other companies.
Geacs ERP products—including System21, Runtime, RatioPlan, Stream-line and Management Data—will be acquired by Infor, another Golden Gate company.
Prior to its being acquired by Golden Gate, Infor had itself gobbled up 15 companies between 2002 and 2005. Once it was acquired earlier this year by Golden Gate, the ERP and supply-chain management software company was combined with Inovis.
Infor now has about 2,300 employees and 18,000 customers. Geacs financial applications and its Industry Specific Applications will be used to create two separate business units within a new financial management company Golden Gate it is financing. The company has been aptly dubbed NEWCO until its given a more suitable name prior to the Geac transaction closing.
NEWCOs Financial Applications business unit, which will focus on selling to the integrated financial services market, will include Geacs Enterprise Server, SmartStream, Anael, Extensity and Comshare products (and employees).
The second business unit will be formed around Geacs ISA businesses—Libraries, Local Government, Public Safety and Restaurants—which will re-main independent from each other as they have within Geac.
A number of Geac employees—those people in finance, accounting, legal, IT and human resources—will also move over to NEWCO.
The proposed deal has been approved by Geacs board of directors. Subject to regulatory conditions, the deal is expected to close in the first quarter next year.