Purchase of SSA GT changes ERP system landscape

In the five years since its founding, Infor has gone from a concept—albeit one backed by deep pockets—to the third-largest ERP vendor in the world, a stature it secured in May upon announcing its 19th and largest acquisition—that of SSA Global. As a result, Infor will become a $1.6-billion application software powerhouse dedicated solely to manufacturing and distribution markets.

Infor has amassed a global base of 37,000 customers in more than 100 countries—a base, says Jim Shaper, Infor chairman and CEO, "that is—in our sweet spot—second to no one."

Summing up the chief takeaway from the acquisition—which effectively doubled the company's size—Shaper says, "Scale matters."

Shaper adds that SSA fell into its sights only weeks before the final deal was announced. He was initially disinclined, largely due to "what I didn't know." But as the M&A team presented to management, he came to see "how complementary the companies and products, management, and employees were.

"The fabric of the company is not that dissimilar from ours," Shaper continues. Once the decision was made to pursue the opportunity, the wheels of acquisition followed a well-proven path. That process has been so precisely calibrated—and Infor's acquisition team has become so expert—that the company says it moved from identifying a target to inking the deal in as little as two weeks.

"We have done a lot of acquisitions, but haven't done any that haven't gone well," he says, adding, "Some have gone better than others." The key ingredient is "the cultures of the companies we've acquired have been consistent with what we've been looking for."

Describing "the New Infor," Shaper says the acquisition of SSA brings increased global scale to support customers in current and new "micro-verticals," especially in complex and project manufacturing—i.e., aerospace & defense, and high-tech electronics. It also adds functionality in transportation management and human capital management. By blending Infor's supply chain planning and product life-cycle management with SSA's supply chain execution product, a complete supply chain management solution is possible. In automotive, it opens the door for Infor to approach OEMs, where it traditionally has serviced primarily suppliers. It will add direct resources in Japan, China, and Brazil; and enable best-in-class solution cross-selling between the combined customer bases.

Shaper says there is very little product or market overlap between the two ERP vendors. SSA had done well in the large enterprise market, comprised of companies with annual revenues of$1 billion to $2 billion, whereas Infor has strengths servicing companies with annual revenues between $20 million and $1 billion. "It's a great fit from a product standpoint, but also from a market perspective," says Shaper.

Infor agreed to pay $19.50 per share in cash—equivalent to approximately $1.4 billion in equity. The deal may be final within the next 120 days.