In a year marked by industry consolidation, perhaps it's only appropriate that 2003 wind down with yet another CRM-related acquisition.
This morning The Sage Group, the U.K.-based parent company of Best Software Inc., announced it plans to purchase ACCPAC International Inc., a Pleasanton, California-headquartered subsidiary of Computer Associates International Inc., in a cash deal worth $110 million.
The deal is subject to regulatory approval but is expected to close at the end of February 2004.
ACCPAC makes business management applications, including CRM, accounting, HR and warehouse management software. Best is the maker of several lines of SMB software, including the CRM applications ACT and SalesLogix.
Best CEO Ron Verni told SearchCRM.com that the ACCPAC acquisition will add 540,000 worldwide customers, bringing Best's customer total to 4.1 million. He also said it would help Best penetrate Australia and South Africa, as well as enter the Asian market.
"In this game, especially with Microsoft getting in, a lot of the challenge is getting the volume," said Laurie McCabe, analyst with Boston-based Summit Strategies. "This augments that pretty significantly. ACCPAC has a large base of customers; it is a good company; it's a profitable company. I don't see any real downsides in this acquisition. The challenge will be what Best has always had -- they've got all these different products to position."
McCabe said ACCPAC gives Best an integrated suite of products. While Best has made some progress in tying together its myriad back-office solutions, the integration has largely come after the fact, McCabe said.
ACCPAC also offers a hosted version of its software, which it launched this summer. Best does not.
"Unlike in accounting where the adoption of ASP is very slow, we see acceleration on the CRM side," Verni said. "Customers have been raising their hands and, quite frankly, have been asking for a hosted application."
In a recent interview with SearchCRM.com, the new chief of Best's CRM unit said the company was exploring ways to enter the hosted market.
Both ACCPAC and Best sell through the channel but say less than 5% overlap exists among their thousands of partners.
"We thought the overlap was going to be far greater than it is," said ACCPAC CEO David Hood. "Perhaps there would be more if the geographic synergies weren't so different."
Computer Associates said its decision to sell ACCPAC stems from its strategy to exit the business applications market and focus instead on its core management software offerings.