French software house Ilog SA is moving into enterprise resource planning, with SAP AG set to develop an advanced planning and optimization module for its R/3 applications suite and spending $10m for a 5% stake in Ilog to seal the deal. Ilog is getting to be an important player in the nuts and bolts world of optimizing programs with re-usable C, C++ or Java component technology. SAP will incorporate Ilog libraries into the Advanced Planning and Optimization module that provides real-time forecasting using SAP’s data caching technology. The module will work with R/3 and third party applications and be generally available by year-end following an alpha release in July and betas in September. SAP’s paying $15.31 for 653,062 shares, a 25% premium over Wednesday’s closing price of $12.25. Ilog, a French company listed on Nasdaq expects to spend SAP’s $10m on other acquisitions after what it says was a very successful experience with its $30m buyout of Cplex Optimization last year (CI No 3,219). The agreement with SAP will not prevent it from working with other ERP vendors. The standstill arrangement means SAP can’t go to the market for additional Ilog shares. Ilog yesterday reported a third quarter net profit of $141,000 including a charge of $1.3m associated with a charge associated with the acquisition of Cplex, compared with a loss of $703,000 last time on revenue that increased 77% to $14.9m from $8.4m. At the nine month mark the company recorded a loss of $29.76m up from a loss of $2.35m last time on revenue up 61% at $38.36m compared with $23.75m.
