Geac Computer has acquired the UK's troubled JBA Holdings, which sells enterprise resource planning (ERP) packages to the mid market, for $136.3 million or 92.5 million sterling in cash.
The move follows a tough 12 months at JBA, in which it turned in losses for its fiscal year, restructured operations, cut staff and saw its share price fall to an all time low of 50 pence from 1,250 pence early in 1998 (see VNU Newswire, 31 March, 1999).
As a result, Geac, a $800 million applications giant, has agreed to pay 2.50 sterling for each of JBA's shares, which amounts to a 70 per cent premium over the firm's stock price before it announced that a bid was in progress.
JBA generated revenues of 215 million sterling from continuing operations last year, which means the joint company is now a $1 billion corporation.
Douglas Bergeron, Geac's president and chief executive, said he had been working on the deal for the past six weeks or so, but the two organisation's would mesh well.
Geac sells between 65-75 per cent of its packages in North America, 25 per cent in Europe and 10 per cent in Asia Pacific, while JBA does 60 per cent of its business in Europe, 30 per cent in North America and 10 per cent elsewhere.
The deal has been approved by the boards of both companies, but Geac needs it to be accepted by at least 90 per cent of JBA's shareholders. The board owns 11 per cent of the firm's stock, while Geac has already purchased 2.7 per cent, but no break up fee has been agreed upon should the transaction fail to be completed.
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