At the moment, he believes the company’s very weakness is its greatest defense. We are not the kind of prey people would look at, he said. That is good and bad. It is bad because we are not at the level where people would think to court us, but it also protects us. It takes special skills to take a broken business and it can kill [the acquirer]. That is what GEAC did and is what SSA is doing – the Baan acquisition was difficult.
We would have been prey for Oracle if it could not buy PeopleSoft, he said, but right now we have a strong shareholder structure, [shareholders] do not want to sell but do want to help us make acquisitions in the US so we can become bigger. The company also recently received an $85m cash injection for its new management to use to turn the business around.
Sciard is putting an extensive recovery plan into place that will touch all areas of the business and part of that plan includes expansion into the US market. He does not underestimate the scope of this challenge. The US is a tough market and we are not even a dwarf there, but we have got good technology that does not exist now, he said. We have a major handicap because we are too small and our balance sheet is not solid but the product is two years ahead. Intentia has come through the painful process of rewriting its applications in Java and componentizing them.
Good technology is not everything though and he believes the company needs to spend to grow so plans to make acquisitions to give it the critical mass needed to be visible in the US. Just what type of business it might acquire is still undecided. It could make its selection on the basis of customer base or opt for an established service provider in one of the two vertical industries it already has a strong base in and it is targeting in the US, retail and distribution. Due to the costs of an acquisition, targets will be companies with $200m to $400m in annual revenue.
However, Sciard stressed that the acquisitions would add real business value: We do not want to be a seen as a consolidator like SSA, he said.