HCM Provider Lawson Software Purchased by Private Equity Firm

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Apr 26, 2011

See update below.

Lawson Software, a provider of a wide variety of business management programs including enterprise human capital management, will be acquired by equity investor Golden Gate Capital and its business software and services firm Infor, in a deal valued at about $2 billion. The official announcement was made this morning.

Lawson’s stock, which traded as high as $12.50 a share after Golden Gate and Infor made an offer last month, dropped $1.01 following the news. It was trading at $11.11 in mid-afternoon in New York; 14 cents below the $11.25 per share purchase price.

The company, 11 percent owned by investor Carl Icahn, shopped itself around after the offer, according to Reuters, but found no takers.

Based in St. Paul, Minn, Lawson focuses on specific industries: health care, services, public sector, equipment service management & rental, manufacturing and distribution, and consumer products. As an ERP developer, its programs touch all critical areas of company operations including finance, supply chain, asset management, manufacturing ops, and human capital.

It’s 4,500 customers span the globe, with a strong concentration in North America and Europe. At the end of 2010, it acquired HR services provider Enwisen for $70 million.

When the deal is complete, which is expected in the third quarter and must be approved by shareholder vote, Lawson will be folded into Infor, a company HR technology guru Naomi Bloom called an “ERP graveyard.” Writing earlier this month on her blog and here at TLNT about the bid by Golden Gate and Infor, Bloom said,

This is where old software goes to die, to be milked for its installed base’s maintenance revenues with only modest, ongoing upgrades, doing just enough to retain that installed base.”

She concluded with this lament about Lawson’s future:

I hate that this proud company, with an important legacy of industry focus, strong HCM products, and management integrity, may well disappear into Infor — a very sad ending indeed.”

There’s no word on any layoffs, support or related issues with the acquisition yet.


UPDATE: According to the Minneapolis Star-Tribune, the fate of Lawson’s workforce in this acquisition remains uncertain.

Lawson spokesman Terry Blake said executives “don’t know, frankly” whether the combined Lawson-Infor business will need all of Lawson’s workers, or whether Lawson’s St. Paul headquarters will remain an important company location. Infor is based in Alpharetta, Ga.

“There’s good and not so good in deals like this,” Blake said.

It’s also unclear whether Harry Debes, Lawson’s CEO and president, will have a role in the combined operation.

Analyst Steve Koenig of Longbow Research in Cleveland said there is no doubt Infor will downsize the Lawson staff, but it may focus cuts more in administrative functions than other areas. “The cuts also will depend on whether Infor decides to go to market with the Lawson products or just maintain the ones that have been sold,” Koenig said.”