Emeryville, Calif. - Expense management software provider Extensity Inc. last month said it agreed to be acquired by Toronto-based Geac Computer Corp., a business software provider. Geac was known in the travel industry for its hotel property management systems before selling its hotel business to a Starwood subsidiary in April 2001.
According to Geac, holders of 25 percent of Extensity shares already agreed to support the deal, including Extensity's board of directors. Extensity shareholders would receive either $1.75 or the equivalent in Geac common shares for each share of Extensity common stock. Based on those terms and Geac's share price on Aug. 23, the deal is worth about $47 million. Additional consolidation in expense management had been anticipated by sources commenting on the recent acquisition of Captura by Concur
BTN, Aug. 12 That was about a $13 million deal.
"Customers will benefit as Geac will invest in the current Extensity platform and applications as the foundation for extending their enterprise solutions and, over time, offer an even broader selection of financial management applications," said Extensity CEO Bob Spinner in a press statement. "Customers will also benefit from the support, global resources and infrastructure of a large corporation focused on delivering high return on investment solutions."
"Continuing high levels of customer service and customer satisfaction will be a main focus of the combined companies and we will work to ensure that customer relationships are not interrupted," added Paul Birch, president and CEO of Geac.
The announcement follows a strategic alliance agreement signed by both companies in June.
Geac expects the deal to close by the end of 2002, upon which it will eliminate certain administration costs. Extensity late last week said its CFO resigned.
Geac anticipates the acquisition will be approximately 10 percent dilutive to earnings in its first 12 months and accretive to earnings in the following six months.
Geac's sales for the full year ending April 30 were $460 million. Extensity's revenues reach about $20 million annually. Extensity for its second quarter, ending June 30, reported a loss of about $5 million on $5 million in revenues. Geac last week said it earned more than $10 million in its 2003 fiscal first quarter, ending July 31.
Extensity's largest clients include AstraZeneca, Cisco Systems, JPMorgan Chase, Merck and Thomson Corp.