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Geac + Comshare

June 24

In another sign of accelerating IT industry M&A action, Canadian-based software vendor Geac today announced its intended friendly purchase of Comshare for $52 million. The value represents a 30% stock price premium for the unprofitable but cash-heavy $60 million US company.

Comshare's suite of financial planning software "provides many new products to cross-sell to our more than 5,000 [ERP] enterprise customers" said James Travers, president of Geac Americas. Geac, with revenues of about $460 million, is strongly profitable.

While to date most of the recent M&A action has featured software players, we anticipate a pick-up in merger activity among tech services vendors as well. Many of the same forces driving consolidation are present in both industries -- weak demand, buyers pushing for reductions of vendor headcount, industry overcapacity, the lure of economies of scale, and in some cases, excess target cash.


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