Lawson to Acquire ERP Software Developer Intentia

Lawson's CEO will step down; the acquisition is expected to strengthen Lawson's foothold in the upper tier midmarket.

Lawson Software Inc. announced Thursday the acquisition of Swedish ERP software developer Intentia International AB in an all-stock transaction that amounts to about $480 million.

The company also announced that its CEO, Jay Coughlan, will be stepping down.

An 18-year veteran of the company, Coughlan served as Lawsons CEO since 2001.

He will be replaced by Harry Debes, a former executive with J.D. Edwards & Co., itself a former midmarket enterprise resource planning provider that was acquired by PeopleSoft Inc. in 2004.

PeopleSoft was subsequently acquired by Oracle Corp. earlier this year.

A pairing of equals, the acquisition of Intentia will help to strengthen Lawsons foothold in the upper tier midmarket, where its been fiercely battling bigger players with much deeper pockets—the likes of SAP AG and Oracle.

The worlds largest and second largest ERP providers, SAP and Oracle, have been aiming their wares at the midmarket for several years, with larger enterprise deals ever on the wane.

At the same time, the ERP sector is rapidly consolidating and morphing from an applications-only industry to one that provides much broader functionality such as integration and composite application development.

The changes represent a good opportunity for the new Lawson, according to company founder and Chairman Richard Lawson.

"With J.D. Edwards being gobbled up by PeopleSoft and that being gobbled up in Oracle, we believe thats leading to a huge opportunity in the upper midtier marketplace," said Lawson.

"Weve always competed with SAP and Oracle; thats not new to us. This [acquisition] is just going to do nothing more than help us compete now that we have a more global reach, and more verticals."

The merger is complementary in that few, if any, of Lawson and Intentias customers or vertically aligned applications overlap.

While Lawson concentrates in the health care, government, education and financial services industries, Intentia serves the manufacturing, distribution, food and beverage and retail industries.

The manufacturing and retail expertise will, in particular, help Lawson compete against the likes of Oracle, who gleaned those capabilities from its recent acquisitions.

The combined Lawson and Intentia will feature a host of applications including ERP, enterprise performance management, supply chain management, enterprise asset management and customer relationship management, according to Lawson.

/zimages/1/28571.gifClick here to read more about Lawsons plans to overhaul its ERP suite.

The two companies, which currently share a similar technology base, will standardize on Lawsons Landmark Java-based architecture moving forward.

Landmark is Lawsons answer to a service-oriented architecture in that it enables componentized applications and an open development environment.

Intentia has developed its applications using a similar architecture.

"Thats what was so exciting to us," said Lawson. "Their technology is a lot like ours. In 1997 they rewrote their applications in Java. They run on the same basic platform as us, their program models and technology is very nearly like ours. We see it as a way to marry both companies with the same technology base."

The deal is expected to close by Dec. 31, 2005.

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