offers to buy Speedware for $114 million
Activant Solutions tenders stock offer;
officers pledge nearly half of companys shares to
Business has grown so much at Speedware Corp. that
an Austin-based firm is borrowing $90 million to buy the Canadian
corporation in a stock purchase valued at more than $114 million.
Activant Solutions, a privately-held company with operations in the
US, France, Ireland and the UK, plans to purchase Speedware in a
friendly acquisition expected to close in 45 to 60 days.
Activant reported in an SEC filing that the
company has already secured a lock up agreement to
purchase 48 percent of the outstanding common Speedware shares from
key shareholders in Speedware. Executives in the equity pool Polar
Capital Investments, which became Speedwares controlling
shareholder in 2002, were among those listed in the lock up
agreement. The group also included Speedware Ltd. founders Ian
Farquharson and Jean-Pierre Theoret, as well as Speedware Corp. CEO
In the SEC filing, Speedware agreed to halt any
actions to sell itself to any other companies on Dec. 6, 2004. The
Activant offer to purchase all Speedware shares at $3.19 per share
a 20 percent premium over the stocks price on the day of
the offer was tendered on Jan. 24 of this year. Speedware
shares closed at $3.85 per share after Activant made its offer.
Speedware said it wasnt seeking a buyer when
Activant made its offer.
The division of Speedware that serves the HP 3000
market, Speedware Ltd, is unlikely to see changes, according to
Speedwares top corporate officials. That group is very
profitable, and its made great strides in the migration
space, said Gutman. Theres a tremendous amount of
momentum in that division.
Speedware had been through an ownership change to
spark the parent corporations growth. Gutman joined Speedware
as CEO in 2001, and Polar took on majority ownership the next
We took a company that was struggling, and
executed our strategy well to make it a very profitable
company, Gutman said. We demonstrated were not
afraid of these legacy markets, because theres jewels hidden
The parent corporation boosted revenues from $21
million to $36 million over the past year. Profits more than doubled
in 2003 and continued to grow during 2004, fueled in part by
acquisitions like last years $1.85 million purchase of eXegeSys
products that led Speedware to form a new OpenERP Solutions division.
The company also purchased wholesale distribution vendor Prelude
Systems last year. A 2003 acquisition valued at $12 million brought
Enterprise Computer Systems Inc., a building materials distribution
software vendor, into Speedwares portfolio.
Now the company joins the much larger Activant, a
move that Speedware Ltd. Director of Marketing Chris Koppe painted as
an addition of resources.
Activant is an ERP company, so their main
interests are in Speedwares ERP holdings, Koppe said of
the Prelude and Enterprise divisions. Weve come along
with the transaction in their eyes. But there is interest in our
business intelligence business. Migrations are not part of
[Activants] core business. The only thing that changes for
Speedware Ltd. is that we go from being part of a $36 million company
to part of an over $200 million company.
Activant has built much of those resources in the
distribution software business, offering a range of solutions to
track components at lumber and building materials stores and retail
auto aftermarket outlets. Over 18,000 wholesale, retail and
manufacturing customer locations use Activant in lumber and building
materials, hardware and home center, automotive and other
The companys solutions include software,
professional services, content, supply chain connectivity and
analytics. Speedware Corp. officials say that Activants size
and technical ability will make it a good home for the Canadian
Activants deep vertical expertise,
large installed customer base and solid technology are a natural fit
with Speedwares business, said Gutman. The combined
entity will give our customers additional world-class service and
best-of-breed products for driving their business growth.
Activant said it expects its customer base will
increase to 20,000 with the Speedware acquisition.
One customer which Speedware has helped migrate
plans to monitor the new ownership for signs of maintaining a
commitment to products for developers.
We believe Speedware delivers a good suite
of development products for maintaining business applications, one
which provides them with a competitive edge in the HP 3000
market, said Doug Smith, IT director at the Teachers Retirement
System of Louisiana. But that market is dwindling. Our plans
for the next couple of years were to monitor the success of
Speedwares development products in the more open and more
competitive Unix environment. The buyout of Speedware raises concerns
for a long-term commitment by the new owners, which TRSL will be
The Speedware Ltd. offerings of business
intelligence and system migration tools received such pledges
in the Activant announcement of its tender offer. In addition,
OpenERP Solutions business was mentioned as an avenue to
introduce Activant to small and mid-size manufacturing
customers with next-generation ERP and supply chain applications
built on open source platforms.
Speedware Corp. officers said last fall they
wanted to buy more companies in the HP 3000 community to continue the
Speedware growth. The general manager of the OpenERP Solutions
division has told his 100 eXegeSys sites running on HP 3000s that
they need not migrate away from their platform if they can secure
third-party support agreements. Gutman said that purchases of
HP-related companies could well continue once the acquisition is
approved by shareholders.
Activant changed its name in October of last year
and hired Larry Jones as its new CEO. He said that Activant shares
the same growth and acquisition goals as Speedware.
Activant is focused on growth and
acquisitions to become the premier technology provider of vertical
ERP software and solutions to select industries, Jones said in
a press release. The acquisition of Speedware is our first big
step in this new direction and lays the foundation for revenue
growth, technology innovation and increased thought leadership in key