Great Atlantic Partners is believed to be the most likely winner of the Baan auction.
Private equity group General Atlantic Partners is the favorite to buy Baan as the auction of the troubled ERP vendor by owner Invensys reaches its climax.
If General Atlantic succeeds in beating other companies in the bidding for Baan, it is likely to pass on the control to SSA Global Technologies, a rapidly-expanding mid-market ERP company it has been bankrolling.
Once a major player in the ERP marketplace, Baan struggled under poor management until, during the peak of the dot-com boom, industrial automation specialist Invensys acquired it for about $714.7 million in 2000. While the two companies appeared to be logical partners, with a customer base in the industrial sector, Invensys found it impossible to make money from Baan. Baan boasts a 6,500-strong customer base, but is reputed to have lost $30 million last year on revenues of $260 million.
The Baan sale is part of a second recent series of disposals by its heavily indebted owner. Invensys began the first set of disposals in 2001, when it had debts of $5.4 billion. The sale of brands such as Fasco Motors helped to reduce debt to $2.6 billion, but a growing pension deficit and continued poor trading have prompted another round of disposals.
As the relevant trade unions have to be consulted over any sale, leaks have been inevitable, and the Financial Times suggested that General Atlantic will pay as little as $139 million for the company, leaving Invensys to write off $943 million on the venture.
However, General Atlantic could be thwarted by a last-minute bid, and the one other likely candidate is another private equity group Texas Pacific Group. Significantly, none of the other major ERP players have thought it worth bidding for the company that has little of technological appeal and low-value customers.
Source: Computerwire/Datamonitor
