Software
IDS Scheer Chairman August-Wilhelm Scheer and co-founder Alexander Pocsay together own about 15.3 million shares or 47.7 percent of the German software company whose customers include Volkswagen AG, the Darmstadt, Germany-based company said in a statement yesterday.
Software AG in April said it was on the lookout for acquisitions, having as much as 400 million euros in cash. Chief Executive Officer Karl-Heinz Streibich said then that “targets are cheaper” and that Software AG had a pipeline of candidates. The combined company will have more than 1 billion euros in sales, Software AG said.
“This was definitely the right time to buy,” said Clay Richardson, an analyst at Forrester Research Inc. “Definitely prices are depressed and companies that have cash in the bank have been going on shopping sprees. The combined company will also have a much larger footprint to expand into new markets, such as Asia and South America.”
The offer is subject to German regulatory approval, the companies said. Software AG, which is offering 15 euros a share for IDS Scheer, said the merger will add to its operating earnings in the first full year after the deal closes. The transaction is expected to be completed by the end of the third or early fourth quarter, according to Paul Guely, partner at Arma Partners LLP, the London-based firm that advised Software AG in the transaction.
Software AG has said it is targeting 1 billion euros in revenue and an earnings before interest and taxes margin of 27 percent to 28 percent for 2011.
Software AG rose 2 percent to 50.22 euros in German trading yesterday. The shares have gained 26 percent this year.