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Geac acquiesces to $1bn buyout

Cash pours in through Golden Gate

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Enterprise software supplier Geac Computer Corporation has been bought by private equity firm Golden Gate Capital in an all-cash deal valued at approximately $1bn. The agreement, which is subject to standard closing conditions including the approval of regulators and Geac shareholders, is expected to close in the first calendar quarter of 2006.

Geac shareholders are being offered $11.10 per share or a 27 per cent premium over Friday’s trading price. Crescendo, a dissident shareholder group that owns about 5 per cent of Geac, and which recently fought a heated proxy battle with the board, supports the deal, Reuters reports.

David Dominik, managing director of Golden Gate Capital, which has more than $2.5bn under management said that Geac would be reorganised into two separate Golden Gate Capital portfolio companies.

As part of this reorganization, Infor, an existing Golden Gate Capital funded company, will acquire Geac’s ERP software products – including System21, Runtime, RatioPlan, Streamline, and Management Data – and the workers who support them will move to Infor. Geac’s financial applications and the Industry Specific Applications (ISA) will operate under the name of a new (and as yet unnamed) company within the Golden Gate portfolio.

Reorganising Canada-based Geac's business using this 'assembler' strategy will repeat a model used by Golden Gate in previous acquisitions. "Golden Gate Capital looks at acquisitions with a different perspective than most private equity firms. We seek to integrate companies that can grow significantly faster together than they could on their own. This strategy has been implemented successfully by Concerto/Aspect Software, AttachmateWRQ, Inovis and Infor," Dominik said. ®

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