27 August 2002 Acquisitive software vendor Geac, a supplier of business applications for vertical markets, is to acquire expense management software vendor Extensity in a deal valued at $46.2 million (€47.3m).
The purchase will enable Geac to augment its enterprise resource planning (ERP) software with modules to automate the process of reimbursing employees for travel and other expenses.
The move has been applauded be analysts who have tipped the expense management software sector for fast growth. By 2006, organisations will spend around $2 billion (€2.1bn) on expense management applications, according to AMR Research analyst Jim Shepherd. He says that Emeryville, California-based Extensity is “well-established” in this market with more than 400 customers in 40 countries.
Its acquisition follows a partnership Geac finalised with Extensity in June 2002. The agreement enabled Geac to resell Extensity’s entire suite of applications, although initially it focused on its flagship enterprise management applications.
However, Geac’s acquisition strategy has often been called into question. In 1999 and 2000 it completed numerous acquisitions, including Clarus’s ERP business; Gazette Technologies, a developer of data warehousing software; JBA Software, a UK-based supplier of vertical industry applications; and RunTime, a vendor of customer relationship management for niche verticals.
But Geac’s revenues have continued to slide. In the year to the end of April 2002, revenues fell to $719.5 million (€736.4m), compared to $834.8 million (€854.4m) achieved in the previous fiscal year. On a more positive note, Geac posted net income of $51.8 million (€53.2m) in 2002, after a net loss of $255.8 million (€261.8m) in 2001.
