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November 29, 1998

DAMGAARD BUYS OUT IBM AND LOOKS TO IPO

By CBR Staff Writer

Damgaard Holding A/S, the Danish software group, has bought out IBM Corp’s 50% share in a joint development company designed to market the company’s financial and business management software packages. The split is an amicable one and they remain partners, with Damgaard joining IBM’s solution developer marketing program. But behind the scenes Damgaard – formed 15 years ago by brothers Preben and Erik Damgaard – had become frustrated by having to refer all decisions to IBM. They felt the US giant was giving insufficient attention to their products, despite introducing their software to international markets, particularly in the US. Damgaard, which competes directly with companies such as Great Plains Software Inc and JD Edwards & Co, is tipped for an IPO in the near future, and the break with IBM is seen as a move to gain total control of international sales. The company is looking into it but no decision has been made yet, is Damgaard’s official reaction. Sales of the company’s software licenses are running at more than $50m a year and the company boasts 60,000 installations of its main Concorde XAL package with more than 500,000 daily users. Damgaard is targeting companies with around 1,000 employees with its new Axapta package, putting it into battle against SAP AG, which has launched lite versions of its software to compete in the mid-market. Damgaard now has eight subsidiaries outside Denmark, including a US headquarters in Atlanta, Georgia. It hopes a public quotation next year will give it presence on the international stage.

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