Tempe, AZ September 23, 2002 Enterprise asset management specialist Peregrine Systems announced on Sunday that it has filed for bankruptcy and that it will sell its customer relationship management business unit in its latest divestiture.
In a statement, San Diego-based Peregrine said that it would continue operations as usual during its reorganization under Chapter 11 of the bankruptcy code.
The company is set to take in $350 million on the sale of its Remedy CRM unit to BMC Software. Peregrine had purchased Remedy for more than $1 billion in cash and stock in June 2001 in an ill-fated move into the CRM market. The deal, subject to approval by the bankruptcy court, is expected to close by the end of the year.
The struggling Peregrine has been selling off units over the past several months in a bid to remain viable. In June, in the midst an accounting brouhaha, the company sold off its profitable Harbinger and Extricity businesses to a private equity firm in an effort to refocus on its core enterprise asset management business. Those two businesses relaunched as Inovis, a supply chain enablement provider, earlier this month.
In August Peregrine announced the sale of its transportation asset management business to MAXIMUS and its FacilityCenter product line to TRIRIGA.
Part of the proceeds from the Remedy sale will be used to maintain current business operations at Peregrine, according to a statement from the company. "Daily operations at all business units will continue as usual," the statement said. "Employees will continue to report to work, and will be paid as always; suppliers will be paid in the ordinary course of business for goods and services provided following the filing."
Peregrine has laid off nearly half its employees since June, whittling down its staff to about 1,700, according to newswire reports.
Peregrine has been under investigation by the Securities and Exchange Commission over the accounting irregularities, which had prompted the company to announce it incorrectly booked $100 million in revenue over a three-year period. Over the weekend, Peregrine announced plans to file a $1 billion lawsuit against troubled Anderson its former auditor, fired as the accounting scandal broke for not uncovering the issues that precipitated the company's slide into Chapter 11.
The company's stock, which hit a high of more than $80 at the height of the dot.com boom in the 2000, more recently has been trading at less than $0.50 on the Pink Sheets after being delisted by the NASDAQ on August 30.
Remedy reportedly generated about $250 million in revenues for the 12 months ending June 30, with positive cash flow from operations. In a statement, BMC said that the acquisition was "a major step" in the company's evolution from a tools and utilities vendor to a big league player in the enterprise management space.
"This acquisition is about fostering growth, and with the financial strength of BMC, customers can be assured that Remedy is better positioned now more than ever to continue to deliver value-added solutions to the market," said Bob Beauchamp, BMC president and CEO in the company's statement.