Deal aims to create largest independent provider of enterprise solutions for the mid-market; links U.S., European customer bases
Irvine, CA — November 14, 2003 — Epicor Software and Scala Business Solutions today jointly announced that the two companies expect to go through with a proposed merger they said would create the largest independent provider of enterprise solutions targeted at the mid-market and based on Microsoft technology.
Under the proposed merger, Irvine, Calif.-based Epicor would pay approximately $87 million in cash and stock for all outstanding ordinary shares of Amsterdam-headquartered Scala. Scala's management has been offered one board seat out of six on Epicor's board of directors.
Scala's supervisory and management boards are expected to recommend the offer to shareholders, who must approve the deal at a general meeting yet to be scheduled. Epicor's board of directors has approved the transaction, but Epicor must still complete its due diligence investigation of Scala and gain regulatory approval of the deal.
Epicor said it anticipates that it will commence the public offer for all outstanding ordinary shares of Scala and publish an offer memorandum in December 2003, and close the transaction in the first quarter 2004.
The combined company plans to further support and develop iScala products, the two solution providers said in a joint statement. "In the long term, the combined company's product offering would be developed using the functional synergies of all products, and the integration advantages of .NET and Web services."
According to the two companies, the proposed merger would create the largest independent mid-market provider of enterprise resource planning (ERP), customer relationship management (CRM) and supply chain management (SCM) applications based on Microsoft's .NET platform and Web services.
"The combined company will expand its global presence with worldwide coverage of sales, consulting and support for mid-market and large multinationals as well as local enterprises, offering a broad suite of integrated solutions that have been implemented by more than 20,000 customers worldwide," Epicor and Scala said in their statement.
Scala's customer base is predominantly European, with Epicor's largest customer base predominantly in North America, Australia and the United Kingdom. Scala also has made inroads into Russia and China.
The resulting company's revenues will be diversified across regions with approximately 52 percent of its revenue base in North America and 48 percent outside North America, the two companies said.
In addition, the two providers said the deal would help the combined company expand its presence in key growing verticals, including financial services, consumer packaged goods, automotive, industrial machinery, electronics and pharmaceuticals.
"The acquisition of Scala enables Epicor to expand its capabilities to service and support its customers, to become a truly global organization with substantial revenue and operating synergies," said George Klaus, chairman, CEO and president at Epicor. "The organization will allow us to leverage Epicor's and Scala's regional strengths and distribution channels to further support multinational customers around the world."
