Geac, FrontRange and Ingres go private

Trend toward private equity firms buying software companies emerges

Private equity firms are to acquire two major software vendors, Geac and FrontRange, and Computer Associates’ Ingres database division is also being sold into private hands.

All three deals were announced last week, making privatisation something of a trend in the software business.

Geac — which has many New Zealand customers, mainly in local government — is to be broken up as part of a deal to sell it to private equity firm Golden Gate Capital.

Last week, Geac announced Golden Gate is to buy it for approximately US$1 billion (NZ$1.46 billion). Part of the deal is that Golden Gate will onsell Geac’s ERP division to Infor Global Solutions, a privately held vendor that Golden Gate part-owns.

Golden Gate plans to form two new business units from the remaining Geac assets. They will be a financial applications unit and and industry-specific applications group.

Geac chief executive Charles Jones said last week: “This should be good news for customers” and that Golden Gate is “committed to continuing the vital support of Geac’s products”.

The second private equity buy last week was CRM vendor FrontRange, which also has a significant New Zealand customer base, including Land Transport New Zealand.

FrontRange is to be acquired by a different private equity firm, Francisco Partners, for US$200 million (NZ$291 million).

In a statement last week, FrontRange chief executive Michael McCloskey said the buyout will allow FrontRange to “continue to pursue our aggressive growth strategy”.

The third private equity move last week was by Computer Associates, which announced its Ingres database division is to be divested into a private entity to be called Ingres Corporation.

Private equity firm Garnett & Helfrich Capital will be the majority owner of Ingres Corporation and CA will be a part-owner.

In a statement last week, CA chief executive John Swainson said: “The partnership with Garnett & Helfrich represents a step toward rationalising CA’s solutions portfolio”.

The move is part of a plan by CA to focus on core areas such as systems management (ie Unicenter) and security management, Swainson says.

In the past few days, two more software companies — Serena Software and Enterays Networks — have entered into sales arrangements with private equity firms.

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Tags privatesoftware

More about CA TechnologiesFrancisco PartnersFrontRangeSerena SoftwareUnicenter

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