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February 22, 2005updated 19 Aug 2016 10:12am

Should Geac Be Buying Again?

With all of the recent M&A activity in the enterprise applications space, competition is getting hotter all the time. Not least in the mid-market space, where Oracle has just bolstered its presence with the acquisition of PeopleSoft (and JD

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With all of the recent M&A activity in the enterprise applications space, competition is getting hotter all the time. Not least in the mid-market space, where Oracle has just bolstered its presence with the acquisition of PeopleSoft (and JD Edwards).

Despite this wave of consolidation though, one former serial acquirer, namely Geac Computer, has been rather quiet. Its last acquisition was in August 2003, when it bought business performance management (BPM) company Comshare.

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Its lack of M&As surely has something to do with the hiring of a new CEO, Charles Jones, to the position of CEO in July 2003. He came in to do some housekeeping after the company had overstretched itself with too many, overly diverse acquisitions around 2000. He clearly wanted to get the house in order before he became distracted by too many acquisitions. It is also possible that the company had started negotiations with Comshare before he joined.

Well, he at least now has the company on an even keel. Its latest six-month sales were roughly flat, while profitability was much improved. But if he is trying to grow the company organically, he’s failing: in its latest quarter the Ontario, Canada-based company saw software license revenue of $15.1m, down 1.4% from $15.3m a year ago.

So is the company about to rejoin the M&A frenzy? Not according to Alastair Middleton, the company’s EMEA marketing director, who told me last week that Geac has "turned its back on simply being a serial acquirer" and is instead focusing more attention on growing license sales organically. He said the company might still make targeted acquisitions. Either way, with the rest of the enterprise applications industry believing scale and breadth is everything, and Geac’s sales pretty much stalled, it seems unfeasible that the company’s Comshare acquisition will be its last.

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