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Infinium Ships New Software, Then Gets Acquired by SSA GT by Alex Woodie It appeared to be business as usual during Infinium Software's last month as an independent entity. The company made two software announcements in December, then declared that its planned acquisition by SSA Global Technologies had been finalized following a shareholder vote. The software announcements, coming a week before the vote, underscored Infinium's intent that its 1,800 customers experience little disruption under SSA GT.
In late October, SSA GT and Infinium announced plans for SSA GT to acquire Infinium, which develops a range of financial and process manufacturing applications for the OS/400 platform. Things moved quite fast after that. In November, the federal government granted Infinium's request for early termination of the waiting period required for such transactions. On December 20, Infinium's shareholders voted in favor of the acquisition. No results of the vote were provided, but it was likely heavily in favor of the transaction, in which SSA GT paid $7 per share of Infinium stock. Published reports initially listed the total value of the acquisition at about $95 million. However, when the 2.5 million vested options of Infinium stock are included in the deal, the true amount comes to just a hair under $100 million. The acquisition solidifies SSA GT's position as a growing powerhouse of enterprise software for the OS/400 platform. In early 2002, the Chicago company acquired the InterBiz unit of Computer Associates. The InterBiz acquisition, coming soon after SSA GT got back on its feet after the bankruptcy and restructuring of its predecessor, System Software Associates, raised questions about SSA GT's capabilities to manage a diverse client and product base. SSA GT's leadership has answered those questions by pointing to the bottom line: the company made $35 million in pre-tax income on revenues of $187 million for the fiscal year ended July 31, 2002. Michael Greenough, SSA GT's chairman, president, and chief executive, has set the goal for fiscal 2003 at $245 million. With the operations of Infinium, which has been consistently bringing in between $16 million and $17 million over the past several quarters, in the bag, SSA GT is well on its way to achieving the mark. In terms of the satisfaction of the customers of the companies SSA GT acquires, SSA GT points to its extension strategy, in which it seeks to build on companies' core ERP foundations by offering them new software that provides capabilities such as business intelligence, enterprise information portals, CRM, supply chain planning, and e-collaboration. SSA GT has already delivered the first wave of extension products (originally developed for BPCS, its own ERP brand) to PRMS (the OS/400-based ERP suite it acquired from Computer Associates), and the company has stated that it intends to do the same thing with the new collection of Infinium software. In this way, SSA GT makes the case that it is improving the longevity and competitiveness of the products it acquires. Because SSA GT can concentrate its efforts on OS/400 software development, and can spread a single functional enhancement to all of its OS/400-based ERP suites through its common object model middleware, SSA GT says that it delivers more enhancements for less cost than its original developers could have provided, which results in long-term security. Call it a variation on the "safety in numbers" theme against the backdrop of the worst economy in a decade and the slow decline of the platform as a whole. This strategy looked promising in light of the InterBiz acquisition. Computer Associates' customers were, for the most part, resigned to not expecting special treatment. CA had hundreds of other products to support, and CA's leadership, even in its wildest dreams, wouldn't consider OS/400 strategic. However, for customers of Infinium--a company already dedicated to OS/400 software development, which had recently overhauled its software to be compatible with WebSphere, and which had a fairly good reputation for providing responsive software updates--the question will be how well SSA GT's maintenance and support matches up to what customers grew to expect from Infinium. That's why it was important that things seem normal at Infinium, even as the company was in the process of handing over the reigns to Greenough and his group of lieutenants in Chicago. The software announcements that Infinium made--Daily Operations Manager 6.0 and Training Administration for Managers and Employees 10.0--only days before the shareholder vote were comparatively minor, but served their purpose. James McGowan, who was president and chief executive of Infinium Software, says Infinium users have little to worry about under SSA GT. "We will work hard to ensure a smooth transition into the SSA GT family while continuing to deliver the responsive support and quality products our customers have come to depend upon," he said.
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