September 2004

Speedware is buying 3000 partners, starting with eXegeSys

In a $1.85 million transaction, Speedware Corp.’s OpenERP Solutions division has purchased the software applications, engineers and customer contracts of eXegeSys, the HP 3000 ERP supplier. The purchase of eXegeSys assets in late August — eXegeSys is still in business, but it’s now out of the 3000 market — is the first of more to come for Speedware Corporation, the parent of Speedware Ltd., which sells the development tool Speedware, migrates 3000 customers as an HP Platinum partner, and offers the AMXW migration tool suite. Speedware Corp. Director of Acquisitions Dave Lurie, who’s purchased distribution application provider Prelude this summer, said Speedware is interested in buying tool and application providers in the HP 3000 marketplace.

“Tell the HP tool and application vendors that I’m looking for them,” Lurie said. “If there was a $10 million opportunity out there, access to cash wouldn’t keep us from doing that.” Speedware Corp. is financing these acquisitions through a combination of public sources (Speedware trades on the Toronto Stock Exchange) and private debt instruments, using existing investors as well as attracting new ones. Speedware Corporate’s chairman Reed Drury is also a managing partner in Polar Capital Investments, a $55 million equity pool focused on technology businesses such as Speedware and eXegeSys, industrial manufacturing and service businesses, health services, and alternative energy.

Polar became the controlling shareholder in Speedware in April, 2002, and worked with Speedware’s founders to fuel growth through acquisitions. One year later Speedware purchased Enterprise Computer Systems Inc., a building materials distribution software vendor, for $12 million. Later that year Speedware purchased AMXW from Neartek. Lurie said the customers of eXegeSys aren’t going to be told to migrate. “Even the customers who are leaving you don’t leave as fast as you think they’re going to leave you,” Lurie said. Speedware is acquiring 11 employees from eXegeSys, including the key developers of the eXegeSys Resource Planning (eRP) and eXegeSys Asset Manager (eAM) applications. Enterprise Computer Systems operates an office in Salt Lake City, where eXegeSys was headquartered, so the acquired employees simply moved across town to work for OpenERP Solutions. eXegeSys will continue to develop the eXist Anywhere customization technology, which it used to port eAM to Linux and HP Integrity servers earlier this year.

OpenERP has its own industry-standard solution to offer to sites considering a move away from eRP, a rejuvenated and redesigned version of the HP MM II MRP package. OpenERP Solutions told the eXegeSys customers that “what has changed is that the eRP and eAM product lines now have the backing of a $45 million software firm and we will have resources and opportunities that will allow us to serve you better than ever.”

General Manager Jeffrey Lyons of OpenERP said his division is aiming at a customer whose size matches much of the HP 3000 installed base: the small to mid-sized manufacturing firm. “Our team, equipped with our new multi-platform, multi-tier, standards-based offerings, will have three main goals: We will continue to diligently support our eXegeSys customers; we will offer them complementary products and the option to choose a new product direction; and finally, we will have a leading-edge solution for the broader market of small-to-mid-size manufacturers.”

Lyons said the new collection of firms across the Speedware Corp. portfolio includes development and migration solutions, business intelligence products and applications that already have installed customers. “We’re not just a vertical company or a horizontal company,” he said. “We’re in multiple verticals, and cross-selling products where we can.”

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