Troubled Baan bought out by investment firm

Computerworld - For the second time this week, a sale has been announced that will affect the enterprise applications market. Yesterday it was J.D. Edwards; today it's applications vendor Baan International BV.
Barneveld, Netherlands-based Baan, which specializes in manufacturing and industrial applications, announced today that its parent company, London-based Invensys PLC, a maker of control systems, had sold it to an investment consortium. Invensys had recently signaled that despite investing millions of dollars into the troubled company, it planned to sell Baan off (see story).
The buyers are Cerberus Capital Management LP and General Atlantic Partners LLC, which also own SSA Global Technologies Inc., a Chicago-based ERP and business process management software provider. Among other areas, SSA specializes in process and discrete manufacturing.
In a statement, Baan said the newly combined company will represent $600 million in revenue and 16,500 customers once the merger is complete. That process is expected to take several months.
"The strength of Baan's solutions, loyal customer base and dedicated employees has provided a foundation for an accelerated investment decision by Cerberus and General Atlantic," Baan President Laurens van der Tang said in a statement. "We have established a customer-driven company that is well positioned for growth as we begin the second 25 years of Baan."
The announcement comes just a day after PeopleSoft Inc. finalized a deal to buy out rival J.D. Edwards & Co., making it the second largest ERP player after SAP AG (see story). The combined Baan/SSA firm could be No. 4, suggested a note from AMR Research Inc., a Boston-based consulting firm. According to AMR, bringing Baan into the fold gives SSA a competitive ERP system to sell to the rest of its installed base, which includes customers acquired from a variety of vendors, including Computer Associates International Inc., about a year ago.
"Skeptics will be quick to dismiss the strategy, believing that SSA GT is adding just one more vintage ERP application to its maintenance-revenue-generating stockpile," said the note, adding that to succeed, there must be some "follow through."
Typically, when an investment group does a software buyout, it usually means it plans to turn it around or tear it up, said Ian Campbell, an analyst at Nucleus Research Inc., a Wellesley, Mass.-based consulting firm. He compared the Baan deal to using a defibrillator on a heart patient.
"Existing customers should be happy about the infusion of cash, which means Baan will be able to continue to invest. ... Outside of that, we don't see it as making any big changes inthe enterprise market. Baan competitors may take note that there may be few more breaths of life there, but no one will lose any sleep," Campbell said.

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