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Infor, Lawson Create Top Three ERP Vendor with Merger

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Posted April 26, 2011 By Paul Shread     Feedback

Infor and Lawson Software have made their merger official, creating the third-largest ERP vendor after SAP and Oracle.

Infor and Lawson Software (NASDAQ: LWSN) made their merger official today, in the process creating the third-largest ERP vendor after SAP (NYSE: SAP) and Oracle (NASDAQ: ORCL).

There had been reports that Oracle might join the bidding for Lawson, but apparently no better offer emerged, as the final acquisition price of $11.25 a share matches the initial offer from Infor parent GGC Software Holdings/Golden Gate Capital.

Shares of Lawson Software fell more than 8 percent on the news, as traders had been betting on a higher offer for the ERP software vendor.

Lawson CEO Harry Debes said in a statement, "After a thorough examination of the strategic alternatives available to the company as well as extensive discussions with Golden Gate and Infor, Lawson's board unanimously concluded that this transaction is in the best interests of the company and our stockholders."

Gartner won't publish its 2010 ERP market share data for another month, but according to the analyst firm's 2009 data, the combination of Infor and Lawson would move the company past Sage and into third place in the $20 billion ERP market. Microsoft (NASDAQ: MSFT), which has been making a strong ERP push as of late, would round out the top five.

Infor CEO and former Oracle president Charles Phillips said Lawson "is a natural strategic partner for Infor, offering complementary software solutions that will extend our existing portfolio, particularly in areas such as healthcare, public sector, manufacturing and human capital management. Lawson's and Infor's respective best-of-class solutions will enable us to expand our commitment to our customers, delivering comprehensive ERP suites."

Lawson said in a statement that the company "conducted a comprehensive market assessment and contacted other potential acquirers including competing global providers of enterprise applications and financial buyers, a process that did not result in a superior proposal. Following a thorough review and analysis of the strategic alternatives available to the company, Lawson's board determined that this merger transaction is in the best interests of stockholders."

Lawson's board of directors unanimously approved the transaction and board members who collectively own about 9 percent of Lawson's outstanding shares have agreed to vote their shares in favor of the transaction.

Lawson noted that the $11.25 a share price is a 14 percent premium to Lawson's closing share price on March 7, the last trading day before news reports speculated about a potential merger. Lawson said it had entered into a non-disclosure agreement with Infor on Jan. 10.

The transaction is subject to customary closing conditions, including the approval of Lawson's stockholders and regulatory approvals and is expected to close in the third quarter.

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