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.


  1. Tofteland already dug the hole a long time ago for FS and put it on life support a couple of years ago. Jim and his team will have no difficulty in pushing FS over the edge and covering it with earth. You must give credit Tofteland for his ability to milk the customers over the last few years, revising his salary when he made no bonus and repricing his options. He will laugh all the way to the bank - that CROOK!

  2. Clearly they bought Softbrands for the hospitality software. Fourth Shift was down to 600 customers in September of 2007 (per a Fourth Shift employee in a position to know) so they probably don't have more than 500 at this point.

  3. Those Fourth Shift customers don't know a milking from a hole in the ground.... YET... But they are going to find out now that they are in the clutches of Infor's infamous, ominous "Audit Team". A word to the wise: Read your contracts up, down, and sideways, because if you step one inch out of line, they are going to threaten, draw blood, whatever it takes to get as much $$ outta you as possible.. Oh, and by the way, if you are thinking about looking for another ERP product, do it QUIETLY, and get it implemented before even uttering a word to your Infor rep.. Thats when they ger REALLY ugly. Welcome to INFOR!

  4. 09/10 - Infor will announce in the next few days that they are no longer offering the FS Edition of SAP Business One to new customers.

    Question - What about the existing customers?

  5. There were big layoffs yesterday. About a third of the manufacturing workforce.

  6. Infor - SAP Business One changes:

    - No new customers for the FourthShift/SAP Business One product.

    - Existing customers can renew licenses, add users, etc, and pay maintenance (but for what?)

  7. FS Version 8 is out and it is the last version of FS as Infor is moving customers over to their cloudsuite product or customers are going elsewhere for their ERP software.For those of us still on FS, most of the support staff are gone and support is spotty at best and FS customers are the ugly step child they have to deal with and don't want to maintain. All things must pass....

  8. Tofteland was a snake when he slithered out of Westinghouse and booted out Spencer Halligas as FS unrivaled VP of Sales in the industry - and the rest they say is a a taudry tale of history......

    1. That is absolutely the truth Mr. Woodson, I was there and you are absolutely correct Mr. Woodson, it was right before the Bermuda club trip - The worst kind of Family Guy you could imagine pompous slug that new nothing about our business. Spencer Haligas was the best "Leader" of FS at its Zenith. It took Tofteland no time to destroy the collaboration of a " family" of the finest experts in the business. Every person was a King and no one wore a crown. Randy demolished that image that FS was known for since 1984 like Nero played the fiddle as Rome burned. I was in the back of the room when Spence had to announce his leaving and was in tears as he left saying, "I just can't do this" as he passed me and into the hall. I have never seen or talked with him since. Mike Fabiachi was our only hope, but even he could not remove the stain of that morbidly obese, bouncing baby huey - shmoe. Its a burden he alone will know and havto indure.

  9. I enjoyed this article and as a company that consults with companies still on Fourth Shift I wrote an article entitled "When's the Right Time to Leave Fourth Shift" that I think your readers may enjoy. Here is the link to the article:

    Thanks and let me know your thoughts.

  10. I worked for a company until 1995 that used FS. In my spare time I dug around in the files and was really pleased with the info I could dig out. I was comfy with dBaseII and had a LOT of fun with FS. DOS was EASY! I have no idea what FS turned into after I left, but I'm sorry to hear about its imminent demise.

  11. Do Fourth shift shares still hold any value? I have some from when I worked at FS UK in the 1980's...