Monday, June 15, 2009

Infor puts Softbrands shareholders out of their misery

To which, the collective world of ERP pundits said, huh?

Softbrands, holders of the Fourth Shift manufacturing product who pinned their entire future business plan on plugging into SAP (and maybe one day being bought by them), decided to sell out to Infor and its Daddy Warbucks Golden Gate Capital, for $0.90 a share, or about $80 million. Well, $41.2 million anyway - the rest goes to paying off debt and preferred shareholders. It's still a nice premium over the $0.47 closing price last Thursday before the deal was announced, as SoftBrands CEO Randy Tofteland helpfully noted: "This transaction allows SoftBrands stockholders to realize significant value from their investment in our company over recent trading levels."

He then continued, "In addition, we increase value to customers through expanded products and services from the alliance with Infor."

Yeah, right. Longtime readers of this blog know what that means.

The 451 Group's China Martens (subscription only) ran down the interesting history of Softbrands, some of which was new to even your humble Graveyard blogger:

SoftBrands has a somewhat complicated history. Fourth Shift Corp was founded in 1984 and was acquired for $40m in cash in 2001 by AremisSoft, a public company that had already bought some hospitality software vendors. AremisSoft started to crumble amid class-action lawsuits and allegations of fraud later that year. SoftBrands came into being at the end of 2001 as a wholly owned AremisSoft subsidiary housing the manufacturing and hospitality products. AremisSoft filed for Chapter 11 bankruptcy protection in March 2002 and SoftBrands emerged as an independent entity after the reorganization. It raised $20m in external funding before going public in 2005. SoftBrands also made a number of purchases including Medallion, Infra Business Solutions and Hotel Information Systems.
The one thing everyone seems to agree on is that Fourth Shift's special arrangement with SAP is unlikely to survive the new Infor owners. Seeing as how they stopped selling the non-SAP flavor Fourth Shift completely some time ago, it's hard to see how Infor is going to do anything with the Fourth Shift product but dig a hole and throw it in.