FSN: GEAC to throw off shackles of public company status post acquisition

GEAC to throw off shackles of public company status post acquisition

21st November 2005
Listed status has limited the ability of Geac to compete for acquisitions and grow according to Tim Wright, Geac's CEO of EMEA and Asia Pacific. Speaking to FSN shortly after the announcement that Golden Gate Capital, a private equity firm is to acquire the business for around US$1.0 billion, Wright said, “We are a solutions business, not a software house which means we want to grow the breadth of our offerings. We've done everything right and transformed the financial strength of the company but found it increasingly difficult to reconcile the needs of hedge funds with our shareholders' and customers' needs for long term stability and growth.”

Wright told FSN that GEAC had been in the race to acquire the Mapics, the ERP system which was recently acquired by Infor, another Golden Gate company. “The valuations placed on software houses are too high by any measure and under the present governance regime we have to be fiscally responsible. Yet at the same time, in a rapidly consolidating software market we do not want to be the last person left standing at the party.” The transaction with Golden Gate Capital, which is expected to complete around March to April next year takes GEAC into private ownership and leaves it free to make acquisitions.

GEAC is going to concentrate on products that relate to the office of the CFO. “We want solutions that deal with every process that surrounds a dollar when it arrives in a company until it eventually leaves” said Wright. He sees plenty of portfolio gaps and opportunities in cash management, treasury and electronic billing.

Wright also sees room for differentiation in other areas. “The whole market is competing on a ‘per seat' basis. We want to differentiate ourselves form the pack by offering business performance capability on very high volume businesses in for example financial services.” A move that Wright concedes might take GEAC more into competition with players such as SAS. “It was a tactic that was key to GEAC's success in winning with the Inland Revenue”, says Wright.

The GEAC brand has also not been helpful to the organisation's progress but a new branding has yet to be developed for the financials business of GEAC which will regroup as a distinct business in the Golden Gate Capital portfolio. “ Golden Gate has an excellent track record in building software brands and dominating vertical markets. I do not know what the new name will be for the company.”

An announcement of the new CEO for the financials business is expected very shortly according to Kevin Samuelson, from Golden Gate Capital, but Tim Wright does not rule out an in house appointment.

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