CA Jettisons Small Business Application Division
Making good on its promise to focus on suites of Web services and enterprise management packages such as its Unicenter line, Computer Associates has sold off its business application subsidiary for $110 million in cash.
The 90 percent ownership of CA’s subsidiary, ACCPAC International, passes to The Sage Group, the United Kingdom-based parent company of Best Software.
ACCPAC specializes in accounting, customer relationship management (CRM), human resources and point-of-sale software for small- to medium-sized businesses (SMBs).
The deal is subject to U.S. and European regulatory approval, though
officials on both sides expect it to close in February, 2004. After
transaction and other charges, CA expects to pocket $88 million in cash.
Sanjay Kumar, CA chairman and CEO said the sale supports its commitment to Unicenter and other management software, “while providing opportunities for ACCPAC employees and transitioning customers to a company that is ideally positioned to care for them,” he said in a statement as part of the announcement.
The Sage Group’s subsidiary, Irvine, Calif.-based Best Software, will pick up ACCPAC’s 540,000 business customers and channel of 7,000
business partners. Best Software said the company expects very little overlap with its current accounts.
The purchase marks the 15th acquisition in five years for the company, which has been building up its presence in North American, Australian and Asian markets.
In an industry where every major technology vendor is wooing the small to medium-sized business segment, the sale of an SMB-focused software division sticks out.
Major software developers such as IBM , SAP
, etc. — are investing millions to create SMB offerings. According to market research at AMI-Partners, IT spending for SMBs reached $300 billion in 2003. IBM has spent $500 million on just sales initiatives to its channel partners to get more SMBs on board.
But the sale also reflects the trend by major software vendors in recent years to offload some non-core businesses and stick with “core competencies,” such as enterprise management applications in the case of CA, and then partner with other vendors for other products, such as human resources applications or CRM.
CA is placing a lot of emphasis on the development of its Unicenter enterprise management tools. For example, in early December, it unveiled its Web Services Distributed Management (WSDM) platform, its latest entry in Web services sector.
The company’s platform, which runs on Windows 2000/XP, Linux and Solaris, helps
ensure proper distribution of software services across a company’s enterprise network, among other management duties.