Geac Computer Systems Inc has agreed to acquire the financial and human resources management product lines of Atlanta, Georgia- based software house Clarus Corp, in a deal valued at approximately $17m. The transaction – which continues Geac’s long-established strategy of buying up mid-market companies and products – is expected to close within 60 days. Currently, Clarus has 300 customers across North America, and saw revenue of $40m last year.
As part of the deal, Geac will take on 150 staff and substantially all the ERP assets of Clarus, including products, manufacturing and intellectual property. The two companies will work together during the changeover period. Geac says the acquisition fits in with its existing SmartEnterprise product line, acquired with its $191m purchase of the enterprise software unit of Dun & Bradstreet Co back in 1996. And if its proposed $136m acqusition of JBA Holdings Plc goes through (CI No 3,710), Geac says it will be positioned as one of the top software solutions providers in the world. Clarus’ mid-market software, which has a strong US presence, will complement its other offerings, intended for larger, global companies, Geac said, and will also presumably give it a more manageable entry-level price to win some new business.
Geac has been noticeably affected by the slowdown in the saturated ERP market, which has also been affected by the delaying of projects due to Y2K issues. Last month the company was forced to take a write-down of almost $180.5m in its fourth quarter, the bulk of which was linked to the SmartStream ERP suite. As a result, the company last month reported a net loss of $74.6m, compared to a profit of 112.8m in the fourth quarter of 1998. Geac said last year it would discontinue the SmartStream manufacturing modules, and last month announced plans to slash 200 jobs in the SmartStream business, along with 100 positions in the rest of the company.
Rid of its slower growing ERP business, Clarus will focus instead on its newer Clarus Commerce business-to-business e-commerce product line, which it will sell on a subscription basis. Prices for Clarus Commerce are typically $1m for an enterprise-wide system, but Clarus says it will now offer monthly payment options ranging from $10 to $200 per user per month.
Clarus has been moving into the applications hosting and earlier this month joined the Application Service Provider Industry Consortium. It will offer its applications through an applications hosting partner, Usinternetworking Inc, as well as more traditional direct and indirect channels. E-Procurement, its new flagship product, is currently used in around 20 sites, including MasterCard International, First Data Corp and Hyatt Regency. The Windows NT/SQL Server-based application has a built- in web server, and integrates with Microsoft Corp’s Site Server 3.0 Commerce Edition and Commerce Interchange Pipleine. It also supports Microsoft’s BizTalk. รก
