Infor, a privately held company headquartered in Alpharetta, Ga., provides software primarily for manufacturing and distribution companies. It will pay $19.50 per share for Chicago-based SSA Global, a total of $1.4 billion.
Martin Schneider, a senior analyst for enterprise software at The 451 Group, said Infor's acquisition of SSA Global is part of the philosophy among many in the enterprise software market that bigger is better. He cited the recent merging of Lawson and Intentia as an example of the consolidation going on in enterprise resource planning (ERP).
"Being able to scale from smaller SMBs [small and mid-sized businesses] to larger corporations gives them more options," he said. "The company has more tools and more clubs in their golf bag in terms of being able to attract more customers."
Infor and SSA Global are software vendors that both have a strong iSeries customer base, with SSA Global having just released ERP software earlier this month targeted for iSeries users.
For companies using Infor or SSA Global on System i that may want to upgrade their ERP system sooner, Schneider said the merging would give them more options and add functionality.
"On the negative side, how quickly can they integrate this and not make it seem like you're ripping out your system?" he said.
The acquisition is subject to regulatory approval and is expected to conclude in the third quarter of this year.
Executives did not offer details on how the combined companies would be structured, but promised they would be forthcoming and integration would be facilitated by both firm's commitment to a services oriented architecture (SOA).
"In a rapidly consolidating marketplace, we've all seen that size and scale matter," Mike Greenough, chairman and CEO of SSA Global said in a briefing with analysts this morning. "This transaction will create the third-largest global provider of enterprise software applications."
SSA Global had been a on a buying spree of its own since 2003 and purchased customer relationship management software vendor Epiphany in August 2005. Infor and SSA Global complement one another with their reach into vertical markets and the target size of their customers, executives said.
"Each acquisition we did provided a mosaic and the mosaic now is a crystal clear high-definition picture that we will detail when regulatory hurdle has been cleared," Greenough said.
"We have absolutely every intention, as we have historically done, and Mike has with his business, to support and enhance the products SSA brings to the table," Jim Schaper, Infor's chairman and CEO said. "SOA is a big part of that strategy by allowing our mutual and joint customers to evolve rather than rip or replace."