Baan’s parent lays off 800 employees following acquisition

Chicago, IL—SSA Global Technologies Inc. confirmed Sept 25 that it is laying off 797 of 2,800 employees worldwide at its subsidiary, Baan Co., a longtime enterprise applications developer and manufacturer. The overall job cuts include approximately 200 of the 850 staffers at Baan’s Netherlands-based headquarters.

09/30/2003


Chicago, IL— SSA Global Technologies Inc. confirmed Sept 25 that it is laying off 797 of 2,800 employees worldwide at its subsidiary, Baan Co. , a longtime enterprise applications developer and manufacturer. The overall job cuts include approximately 200 of the 850 staffers at Baan’s Netherlands-based headquarters. SSA is a business application vendor.

These layoffs follow SSA’s acquisition of Baan from Invensys plc (London, U.K.) for $135 million in August 2003. SSA’s own parent companies, Cerberus Capital Management and General Atlantic Partners, were initially scheduled to buy Baan, but SSA eventually became the sole purchaser. Invensys initially bought Baan for about $700 million in 2000, but later decided to sell it to reduce its debt.

Lee Mashburn, SSA’s global marketing VP, says his company is a profitable enterprise resource planning (ERP) software provider that had 1,600 employees and $280 million in annual revenues. As a result, he adds that SSA believes it can soon make Baan profitable as well. Besides the layoffs, SSA has already closed some of Baan’s and its own former offices; combined staffs into a 3,600-employee workforce; and merged finances into one budget with a $600-million revenue plan.

“Baan was bleeding, unprofitable, and had a large R&D infrastructure that wasn’t market driven. Despite making a $100-million investment in its Gemini solution, for example, it wasn’t budgeted to secure a return for 12 to 18 months,” says Mashburn. “We saw acquiring Baan as a good opportunity at a good price, especially after checking the potential synergies and streamlining. Baan has 6,500 customers and great software and products.”

SSA’s solutions traditionally focused on process and consumer industries, such as chemicals, pharmaceuticals, and food and beverage. Baan had focused mostly on discrete industries, such as automotive. Collectively, Mashburn says, they will become the #4 ERP supplier, just behind Oracle.

In addition, SSA plans to sharpen its focus as a supplier of ERP solutions and extensions, such as CRM portals. It projects about 80% of its business will be with manufacturing customers in the lower-end market, which includes firms with about $100 million to $1 billion in revenue.

Control Engineering Daily News Desk
Jim Montague, news editor
jmontague@reedbusiness.com





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