Geac Computer to disappear for good

Geac Computer Corp. started as a Canadian systems integrator and became an acquisitive player in the mid-market enterprise software space.However, its brand name is disappearing and its business broken up following its acquisition by Golden Gate Capital for US$1 billion.
A Golden Gate-funded company called Infor will acquire Geac’s enterprise resource planning (ERP) software, while its financial and industry-specific applications will be rolled into an as-yet-unnamed new company.
The financial applications include Enterprise Server, SmartStream, Anael, Extensity and Comshare.
Executives of the Markham, Ont. company, which has 2,200 employees around the world, said the deal should close by the first quarter of next year.
In the fiscal year ending April 30, Geac pulled in US$444 million in revenue. For the quarter that ended July 31, revenue was down compared to the same period in 2005. Software licence revenue alone in the quarter dropped 16 per cent compared to the previous year.
A private equity firm based in San Francisco, Golden Gate Capital has taken five companies private in the last two years, primary in the IT services areas.
Charles Jones, Geac’s chief executive, said at least 25 other candidates were interested in buying the firm, and five were actively engaged in a deal.
Cresendo Partners, Geac’s largest shareholder, recently tried to block an unprofitable deal, but Geac said it has Cresendo’s support for the Golden Gate acquisition. 
“Geac’s strategy has been horizontal — we’ve offered multiple platforms across multiple industries,” Jones said. “Their strategy has been to be very deep and vertical. As the industry consolidates . . . this combination will afford the ability to deliver that depth to the customer.”
Geac moved beyond its channel roots many years ago by building custom software for clients such as libraries. In the 1990s it began buying smaller software organizations that gave it considerable expertise in mainframes, among other areas.
In 2001, it ousted Ottawa-based business intelligence provider Cognos on an annual list of top ISVs compiled by consulting firm the Branham Group, though by then its stock had already slipped from $27 to $2.
Recently, Geac had branded itself as a provider of software products to assist enterprise CFOs, and became a Microsoft Gold Certified Partner as part of a strategy to build more channel relationships.

Golden Gate
Ray Wang, senior analyst in enterprise applications at Cambridge, Mass.-based Forrester Research, said Geac was a victim of poor management, though he said the company did a good job of handling its maintenance business.
Jones said the Golden Gate deal would take Geac to a new level of valuation without the risks of executing a strategy that must involve acquisitions. Though Geac’s name won’t survive the transaction, he said some of its product names will.
“The MPC product will be as good for Infor and other Golden Gate products as it has been for Geac. It widens the channel,” he said. “I think it’s good because it ensures the larger enterprise that there is an ability to invest in new product solutions.”

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