Coda sell-off leaves Baan at a loss
Baan has sold its Coda financial applications unit to UK reseller Science Systems for $50m (£31m) in cash - considerably less than the enterprise resource planning vendor (ERP) paid for it originally.
Baan has sold its Coda financial applications unit to UK reseller Science Systems for $50m (£31m) in cash - considerably less than the enterprise resource planning vendor (ERP) paid for it originally.
But the move came as no surprise to the channel, after struggling Baan hired investment bank Lazards to assess strategic options (CRN, 9 February).
The unit's sale comes exactly two years after Baan bought it for $86.6m.
Chippenham-based Science Systems is one of Baan's major partners and is the vendor's biggest reseller, with over 2000 Coda sites worldwide.
In a prepared statement, Baan officials said the sale would enable the company "to concentrate on leveraging its core strengths in integrated ERP, supply chain and customer relationship management, while at the same time extending those products into the business-to-business e-commerce space".
The officials also said the company would record a gain of $30m for its next fiscal quarter related to the transaction. But the figure is derived after deducting what remains of the original acquisition fee from the current cash sale price.
Ironically, the deal was brokered by Klass Waganaar, who was chief financial officer when Baan originally purchased Coda.
The relationship between Science Systems and Coda has existed since 1989.
Graham Steinsberg, head of the Science Systems division responsible for Coda, will take charge of the new organisation which will see the existing Coda division at Science Systems merge with Baan's Coda business.
Steinsberg said: "Secure access across the Web from anywhere in the world has already allowed us to enter the fast-growing ASP (application service provider) market. Recent sales in both Europe and the US have proved that the product is ideally suited to companies looking to promote added-value applications across the Internet."
Jim Shepherd, senior vice-president at AMR Research, applauded the move."This was the right thing for Baan to do, and it should be a very good opportunity for Science Systems to gain some visibility and perhaps build a presence outside the UK," he said.
As well as Coda, "AMR believes Baan must sell off several of its acquired businesses, such as Aurum, Beologic and Caps Logistics, in order to regain some financial stability and company focus," said Shepherd.
Byron Miller, vice-president of ERP research at Giga, added: "Baan was doing really well before it decided to go on an acquisition binge. I suspect it will be a move back to its core competencies, which are focused on manufacturing."