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Infor Puts Brakes on Acquisition Spree

by Jeff Moad, MA Editorial Staff

Posted on Tuesday, September 11, 2007 5:08:00 PM       Sign Up to receive Daily News Alerts in your E-mail Inbox                               

LAS VEGAS — The ongoing upheaval in the debt markets has forced Infor Global Solutions to rein in its torrid acquisition binge, the company's chairman and CEO, Jim Schaper, said yesterday in an interview.

"We won't be doing any large acquisitions in the near future," Schaper told Managing Automation at Infor's annual Inforum customer conference here. "That's partly due to the current market and partly due to internal issues." Schaper said Infor may well pull the trigger on smaller deals in the near future, but it's unlikely the company will engineer any more large acquisitions, such as its $1.6 billion takeover of SSA Global last year, in the near future.

The shift marks at least a pause in one of the largest sustained acquisition runs in enterprise software industry history. Over the past four years, Infor has spent $4.39 billion — mostly from private equity partners such as Golden Gate Capital — to acquire 31 software companies. The run has helped Infor grow from a small, little-known software vendor to one with more than 70,000 customers, $2.3 billion in annual revenue, and the wherewithal to rival industry leaders, such as SAP and Oracle, particularly in the mid-market.

Yet, the private equity sources of capital that Infor has used have become harder to access or too expensive as lenders have become more conservative, concerned about the repercussions that sub-prime lending problems have brought to the market. Schaper called lenders' tightening "an overreaction," but said he does not expect to see it ease until at least the end of 2007.

Infor's most recent acquisitions came in June, when the company bought human capital management (HCM) software vendor Workbrain and Hansen Information Technologies, a provider of applications for state and local governments.

For now, Schaper said, Infor will concentrate on integrating and extending its current collection of enterprise software offerings and on preparing the company for an initial public stock offering, which could take place within the next 12 months.

Besides allowing Infor to tap into a public source of equity, going public would raise the company's profile, a benefit in its ongoing competition with SAP and Oracle. "A lot of people still don't know who Infor is," Schaper said.

He insisted, however, that the hold placed on larger acquisitions does not signal any fundamental change in Infor's growth-through-acquisition strategy. The company expects to return to a more aggressive acquisition approach when conditions permit, he said. "This will allow us to catch our breath and do one job for a while instead of two."

In other news announced at Inforum, Infor provided additional detail on how and when it will implement its Open SOA (services-oriented architecture) strategy, initially announced in March. Infor officials said the company will SOA-enable each of its major enterprise application products — including ERP LN, SyteLine, ERP Visual, HCM Workforce Management, XA, Adage, and other platforms — over the next 14 months. Infor also plans to roll out a series of SOA-enabled application components that duplicate and extend key functionality currently found in Infor applications. These components will interoperate with existing Infor applications, so customers running multiple Infor products can centralize key functionality, allowing for improved flexibility, said Bruce Gordon, Infor's CTO.

These components will include a common role-based user interface, new business intelligence reporting services (enabled by new master data management middleware), a cost analysis module, a pricing/contracting/invoicing module, an inventory control module, and a Web-based order-entry module. Infor also plans what it calls a multi-books accounting module that will allow manufacturers to run different financial ledgers in the various countries where they operate and to roll up and report financial results centrally.