Analysts are saying PeopleSoft may make a strategic supply chain acquisition soon, as it seeks to shore up its business following pressure on its human resources market from SAP.
Last Friday, rumours spread through Wall Street that Manugistics was a likely target for ERP vendor Peoplesoft. At the time analysts downplayed the rumour and said PeopleSoft did not have a track record of acquiring businesses in the open market.
But Bruce Richardson, vice president of research strategy at enterprise technology analysts AMR Research said, "There's a real buzz on that one at the moment. We understand there have been some meetings."
However, Richardson believes that a more likely scenario sees Peoplesoft acquiring troubled supply chain vendor QAD, which last quarter reported losses of $24.3 million on sales of $36.4 million.
"When I recently met with Aneel Bhusri, PeopleSoft's chief strategist he said the QAD thing is 'very interesting'," said Richardson, adding that the company would make a good buy because, "QAD has a lot of customers in markets that would be useful for Peoplesoft."
An insider at Peoplesoft's UK offices said, "We've heard nothing but that analysis does not seem far away from where we need to be."
In Richardson's view, Peoplesoft is exposed because it has failed to really expand into global markets, while QAD has customers in more than 80 countries and offers 26 language versions.
Richardson views an acquisition as a logical step forward, though in his view Peoplesoft has to be cautious because any move on QAD will expose problems.
"QAD doesn't have a clue where the business is going at the moment. They even failed to tell us about layoffs announced the day after our review meeting. It was very unsatisfactory," he said.
As markets opened in New York, Manugistics share price continued to climb - up 50 cents to $14. Last Thursday, it was trading at $10.4. QAD was unchanged at $3.875.
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