Invensys headache heads to Chicago
Sunday 27 April 2003
Chicago-based SSA Global Technologies is believed to be the likely winner of a bidding round to buy Baan, Invensys' troubled software division.
The deadline for bids was last Friday. SSA, a private software company, raised $75m (£47m) earlier this month for acquisitions. Industry sources said that SSA is keen to get hold of Baan, and has the financial headroom to take on the loss-making firm. The head of Baan UK, Catherine Sigmar, is an ex-SSA executive. Other interested parties are thought to be Jan Baan, the founder of the business who sold it to Invensys in 2000 for £470m.
However, sources close to Baan were coy about a quick sale, and it is unclear if the bids were finalised on Friday night. Next month Invensys is expected to make a £650m provision, mostly due to Baan, when it publishes full-year results. It is unlikely to recover much of the money it paid for the business.
SG Securities analyst Zafar Khan does not attribute any value to Baan, and predicts sales of £250m and a loss of £25m this year for the division. But Ben Tompkins at Broadview, an IT corporate finance house, says its 15,000 customer sites worldwide could be attractive.
Invensys is struggling to reduce £1.6bn of debts and £700m of pension liabilities, despite £1.8bn of funds raised from disposals last year. It has eight more divisions up for sale.
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