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  - August 12, 2015 -  

In Major Supply Chain Software News, ERP Provider Infor to Acquire Global Trade and Logistics Provider GT Nexus

In Big Moves for Infor, Company to Shell Out $675 Million for Visibility System Leader, Signalling More Aggressive Approach to Supply Chain Market

 
     
     
  by SCDigest Editorial Staff  
     
 

In supply chain software news, ERP and supply chain software provider Info announced it was acquiring global transportation, visibility and sourcing provider GT Nexus.

The price was a whopping $675 million, a very nice multiple for Infor investors, given it had sales of about $150 million in 2014. Private-equity firm Warburg Pincus owns about 40% of GT Nexus, with its founders and management holding the rest. All will have a big payday.

SCDigest Says:

Infor CEO Phillips has been leading an effort to unify Infor's product solutions set in the supply chain and beyond, and begun to expand the market focus to beyond Infor's existing customers.

 

 

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Infor had sales of about $2.8 billion over the past 12 months, CEO Charles Phillips says. GT Nexus is said to manages more than $100 billion of goods movement for some 25,000 customers. Big-name accounts for the Cloud-based solutions include Adidas Group, Caterpillar, Columbia Sportswear, DHL, Home Depot, Levi Strauss & Co., Maersk, Pfizer, Procter & Gamble, and UPS.

 

The company began operations under the name Tradiant in the late 1990s, and was primarily focused early on in automating various aspects of ocean shipping booking. It changed its name to GT Nexus in 2001, and continued to expand its footprint through both internal develop and acquisitions, notably acquiring TradeCard, a global sourcing vendor, in 2013.

In additional to the sourcing capabilities, GT Nexus is most known for its global transportation management and visibility functions, providing shippers and 3PLs with “control tower” functionality to manage the movement of goods across the world.

It competes in the general category of global trade management, or GTM, against such companies as Amber Road, as well as others in specific areas of its full suite of solutions. GT Nexus has been one of the most vocal proponents of Cloud-based technology from its earliest days.

GT Nexus announced it was looking for a potential buyer in late 2014. Companies as diverse as SAP and Facebook are said to have given the deal some consideration before ultimately passing on the opportunity.

Now, Infor has made its move.

Infor itself is a company built almost entirely on acquisitions, with its roots in a variety of rolled up ERP providers such as SSA, MAPICS, Lawson and others. It has made many acquisitions in the supply chain as well, acquiring supply chain execution providers such as EXE Technologies and Provia among others along the way, some under the SSA brand Inform acquired in 2006.

Early on, the company largely focused on just maintaining that large base of customers across many acquired solutions, but began to change its approach when Phillips became CEO in 2010, after some seven years as an executive at Oracle before that and previously being arguably the world's most well-known enterprise software market analyst while at Morgan Stanley.


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Since then, Phillips has been leading an effort to unify Infor's product solutions set in the supply chain and beyond, and begun to expand the market focus to beyond Infor's existing customers.

 

The GT Nexus deal is certainly something of a culmination of that thinking in terms of Infor's supply chain strategy.

While the acquisition still needs to be approved by regulatory authorities, that is not expected to be an issue, and the deal could close as rapidly as 45 days.

In looking at the deal, analyst, James Cooke of Nucleus Research tells SCDigest that "Infor realizes that in order to maintain its position as a leader in ERP software that it has to have a global cloud trading platform to orchestrate supply chain partners engaged in outsourced manufacturing. The acquisition of GT Nexus supports that objective."

Cooke adds that “Infor has an opportunity to become a leader in supply chain software if it seizes it. That's because the GT Nexus cloud platform provides the basis for a control tower solution, which will become the most important supply chain solution in the next five years.“

Says SCDigest editor Dan Gilmore: "This is a really big move for Infor, a much more aggressive and forward looking acquisition than its previous deals, which tended to be of companies that had fallen on at least modestly hard times, both in the ERP space and the supply chain."

He added that "But GT Nexus enjoys a strong market position and trends in terms of globalization are certainly moving in its favor, with most large and mid-sized companies looking for greater supply chain visibility. Infor paid a high price for sure, more than four times revenues, but this was a big statement relative to its supply chain intentions."


Was the GT Nexus acquisition a good move for Infor? Why or why not? Please let us know your thoughts at the Feedback section (email) or button below.


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