Systems Union has reached agreement with MIS to make an offer for the issued and outstanding share capital of $39.5 million (GBP23.7 million) pounds in cash, or $11.59 (GBP6.94 pounds) per share. Management and other major shareholders holding 50.7% in MIS have signed their acceptance of the offer.

Systems Union currently has $36.6m (GBP22 million) to $38.3 million (GBP23 million) in the bank. It is using $16.6 million (GBP10 million) of its own money, and is borrowing $24.9 million (GBP15 million) from Barclays Bank [BARC.L]. Following the acquisition, it will have $23.3 million (GBP14 million) left in the bank, along with the ability to borrow more, for future acquisitions.

MIS will operate as a subsidiary of Systems Union within a newly formed Business Intelligence Division based in Germany. Technology-wise, the acquisition will add consolidation, budgeting, planning, risk management, sales analysis and data warehousing products to Systems Union Group’s legacy product set. According to analysts, the BI sector is expected to grow 7% CAGR to $11 billion by 2007, with financial analytics leading the way.

MIS, a privately held company, was founded in 1988 and employs more than 450 people. MIS management, including CEO Peter Raue, will remain in place and will be in charge of running the newly formed BI division. The acquisition gives Systems Union an immediate presence in Germany and provide opportunities to sell BI into its own 14,000-strong customer base, and through its 200 channel partners.

MIS has seven offices throughout Germany, seven subsidiaries in Europe, and 13 representatives around the world. It has a client base of more than 23,000 users in 1,000 companies worldwide, and 60% of its revenue is currently derived from services.

Prior to its acquisition, however, MIS was struggling with growth and profitability. While Systems Union may provide MIS with a more stable financial footing, it still has considerable work to do to integrate the BI technology into its own financial management offerings.

Ultimately Systems Union’s goal, like its chief UK rival CODA Plc, is to deliver an integrated corporate performance management solution build on top of its core transactional systems. CODA’s new Financial Intelligence platform is built on technology licensed from Cognos Inc, another BI vendor that also develops budgeting, forecasting, and financial planning applications. System’s Union acquisition of MIS now throws into serious doubt its existing business partnership with Cognos.

By revenue, Systems Union is one of the top 25 software houses in Europe, and the eighth largest in the United Kingdom. The group as a whole is made up of Systems Union Holdings Ltd, the developer of SunSystems financial and business management software solutions (89% of group revenue), Pegasus Software Ltd, an accounting and business software solutions provider (10% of group revenue), and REDtechnology Services Ltd, a web development and hosting company (1% of group revenue).

For the year ending December 31, the group reported net profit after tax of $6.5 million (GBP3.9 million) compared to $3.3m (GBP2 million) in 2001, on revenue down at $124.4 million (GBP74.6 million) from (GBP78.3 million) $130.5 million. It is claimed 40% of its business comes from the UK, 10% from Europe, 27% from Asia, and 23% from the Americas.

The acquisition will boost earnings per share from $11.99 (GBP7.2) to $14.49 (GBP8.7), and revenue is expected to rise $58.3 million (GBP35 million) to $174.8 million (GBP105 million).

The acquisition is expected to complete by Christmas.

This article was based on material originally published by ComputerWire.