Invensys close to selling Baan: report

REUTERS[ SUNDAY, MAY 25, 2003 10:14:40 PM ]
LONDON: British engineering firm Invensys hopes to announce the sale of its Dutch software group Baan for some £80 million ($131 million) this week, UK newspaper The Business reported.

Invensys has narrowed the list of potential buyers down to US private equity firm Texas Pacific Group and an unnamed rival US fund, the report said, citing industry sources.

The company had said it planned to sell more than half its businesses, including Baan, in April.

Invensys reports annual results this week and The Observer cited analysts estimating that it might post a record loss of more than £1 billion.

An Invensys spokeswoman declined comment on the situation.

http://news.ft.com/fttoday
Invensys to sell Baan to General Atlantic
By John Kipphof
Published: May 26 2003 21:57 | Last Updated: May 26
2003 21:57


Invensys, the UK engineer- ing group, was on Monday
night putting the finishing touches on the £85m
($137m) sale of Baan, its Dutch software subsidiary,
to General Atlantic Partners, a US private equity
firm.


The broad terms of the deal are understood to have
been agreed, but Baan's works council is thought to be
seeking clarification on a number of minor points.
Invensys is hoping to announce the deal with
Thursday's full-year results at the latest, but the
works council in theory has the right to delay it by
up to 30 days.

Invensys declined to comment, while General Atlantic
could not be reached.

The sale to General Atlantic, which specialises in
technology investments, comes three years after
Invensys spent £470m ($757m) to acquire the enterprise
resource planning software company at the peak of the
technology bubble.

Allen Yurko, the bullish chief executive who admitted
at the time that Baan was near "financial meltdown,"
lost his job after Invensys warned on profits only
days after the Baan acquisition.

Baan is thought to have lost about $30m last year on
sales of about $260m. Net assets, including
capitalised goodwill on Invensys' books, are about
£650m.

Lord Marshall, chairman, recently told the FT that
Invensys had overpaid and executives overreached
themselves in pursuing a vision of Invensys as an
integrated factory automation and supply chain
management software company.

Invensys is expected to incur a loss of about £575m on
the disposal, which comes as part of a wider programme
of sales intended to offload businesses with sales of
£2.9bn - two-thirds of group sales.

Why are the interested parties all named after oceans?
What a curious theme!
Is there an "Non Specific Arctic Company"?:D

Well, well, this will be very interesting.
For those who remember the "good old days": Tom Tinsley will be back.
He is one of the General Atlantic Partners and served as a former CEO of BaaN Company after Jan Baan stepped down in the second half of the 90's.

The other interesting thing about them is that they already own several other ERP packages: SSA, Meta4 and Exact.

Check out their website @ http://www.gapartners.com/

Perhaps not a bad deal for BaaN after all and hopefully these guys can do what is necessary to get BaaN moving again. Something Invensys forgot to do in the years they owned the company.

Take care and Enjoy life,

Edwin

I think if GA is willing to put some effort into Baan then the sale is a good move. What they don't need however is the umptieth forced integration with yet another (ERP) software package.

Just my 2c.

And another issue that GA should not forget is the installed base. Although they would probably like it, and it surely seems easier for support, they should not only focus on the latest release. A large part of the installed base is not going to migrate soon, especially with the economy as it is at this point in time.

Well, I suppose this is only worth 1c :D

CG
28.05.2003
Baan Set for $139m Sale Private equity group General Atlantic Partners LLC is the favorite to buy Baan Company NV as the auction of the troubled ERP vendor by owner Invensys Plc reaches its climax. If General Atlantic succeeds in beating other companies in the bidding for Baan, it is likely to pass on the control to SSA Global Technologies Inc, a rapidly-expanding mid-market ERP company that it has been bankrolling.

http://www.commentwire.com/commwire_story.asp?commentwire_ID=4418

"Significantly, none of the other major ERP players have thought it worth bidding for the company that has little of technological appeal and low-value customers."

Does everybody/anybody agree Baan customers are are "low value" ?

From my personal perspective, we have spent a lot of money with Baan and peripheral providers.

Why do they claim Baan has "little of technological appeal" ?
Any thoughts?

Ed, remember that these stories have either a positive or negative bias to them.
Commentwire obviously went for a negative bias to their comment hence the 'low value customers' and 'little technological appeal', along with all the depressing talk of how much money Invensys lost by buying Baan for approx £470m and selling for much less.

Baan seems to have significant appeal to many manufacturing companies all over the world and with investment from GAP/SSA then Baan should do very well over next few years.

"Significantly, none of the other major ERP players have thought it worth bidding for the company that has little of technological appeal and low-value customers."

The key in this paragraph is "other major ERP players" !
this is a chance they have to steal some customer by putting Baan down......

This is a worthless comment by vendors who make big bloated crap systems.....we all know who they are.

Baan Sale Delayed as Revenue Slumps
ComputerWire Staff

A collapse in sales at ERP vendor Baan International NV has left its owner Invensys Plc struggling to find a buyer prepared to pay the 85m pounds ($138.5m) it believes the company to be worth.

An announcement on the sale of Baan was expected to coincide with the release yesterday of annual figures by industrial controls group Invensys. However, chief executive Rick Haythornthwaite would only say: "We are in negotiations with a few parties but I don't want to give a specific timetable."

The Invensys figures reveal that Baan sales slumped by 22.3% last year to 188m pounds ($306.4m) leaving the company with an operating loss of 25m pounds ($40.7m), compared with a 5m pound ($8.1m) profit the previous year. Invensys said that significant cost and headcount reductions were not able to offset a decline in high-margin license sales.

Though this has been a difficult time for most ERP companies, none has experienced difficulties on the scale of those of Baan. In the last full year, SAP's sales rose 0.9%, JD Edwards' 1.1%, while Peoplesoft's declined 8%.

Baan's difficulties are even more striking when looked at from the sales per employee. With a 2,800 headcount, it manages sales of about $109,000 for each member of staff. Contrast this with comparable figures of $282,000 for SAP, $235,000 for Peoplesoft, and $196,000 for JD Edwards and its failure to perform becomes clear.

After writing off 585m pounds ($953.5m) from its investment in Baan, Invensys wants to get rid of a company that has hindered its progress. Private equity company General Atlantic Partners remains the favorite to buy the company, but there have been suggestions that the founding Baan brothers might also make a bid.