Business applications vendor Geac Computer Corp’s president and CEO Paul Birch told ComputerWire in an exclusive interview that the company is on the lookout for further acquisitions in the areas of cost and revenue management software, following its September acquisitions of Extensity Inc and the mid-range software business of EBC Informatique.
Geac – a company whose horizontal and vertical applications span a diverse range of areas from ERP, financials and HR to tailored applications for the real estate and construction industries – bought Extensity in September to give itself an offering in the emergent employee relationship management space. ERM includes the automation of business travel and expense reporting, billable and payroll time capture, and procurement.
Birch also said that work is well underway on the integration of Extensity’s ERM products into Geac’s portfolio, including its key ERP suites System21 for the IBM isSeries platform, and SmartStream for other open systems platforms. He said that integration should be complete within the next six to nine months, and that integration would be eased by the fact that Extensity and Geac’s software both exploit J2EE.
Extensity added annual revenue in the region of $20m, no debt and an anticipated $37m in cash and cash equivalents by September 30, 2002 excluding transaction costs. Geac’s other deal, EBC Informatique, gave it additional market share in the French iSeries financial management software space. Birch said that the plan was to migrate EBC Informatique customers to Geac’s Anael financial software.
Birch has been leading Geac on a turnaround since he became CEO in December 2001. Markham, Canada-based Geac had lost direction and momentum after it looked to have spread itself too thinly, with too many applications being peddled into too many geographies, and with too little focus. It had also acquired too many disparate businesses – some of which have since been divested.
Since joining, Birch focused the company on fewer applications and targeted those at their historically most profitable markets. He also drastically de-emphasized its hardware reseller business.
Today 76% of the company’s sales come from horizontal applications, with the rest coming from its vertical applications. Less than 3% of its sales come from its native Canada, with 50% from the US, 40% from Europe, and the rest from Asia Pac. In its latest quarter ended July 31, it reported sales of CAD 155.1m ($98m), compared to CAD 179.6m ($113.7m) in the year-ago quarter. Net income was CAD 16.1m ($10.2m), compared to CAD 17.0m ($10.7m) in the same period the previous year. Birch said he has stabilized Geac’s sales and profitability, and now has a foundation to start to grow sales again.