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The proxy statement filed with the SEC on July 13 by SoftBrands (SBN) concerning Golden-Gate/Infor’s upcoming acquisition of SoftBrands says there was a surprising amount of interest in the almost forgotten Fourth-Shift/AremisSoft, which seems to have been considered the jewel in the company's protracted march to Infor obscurity. And the proxy illustrates why ERP enterprise software, despite the façade of cross-industry general-accounting and human-resource-management marketability, has always really been a very, very industry-specific investment play.

That Infor and its financiers picked up the pieces is not surprising. I’ve lost count but I think Infor is now well north of owning 50 old and once highly respected enterprise application brands. But that parties A, B, C, D, E, F, G and H also showed interest, in some cases did due diligence and—in at least two cases—entered bids says other struggling ERP suppliers can find an end game other than dissolution. (I also wonder if this is where the TARP funds that everyone in Congress is trying to find are ending up—financing risky mergers and acquisitions.)

The parties in question may have included the same suppliers that Piper Jaffray used in issuing a valuation opinion to SoftBrands management. These included Agilysys (AGYS), American (AMSWA), CDC (CHINA), Deltek (PROJ), Epicor (EPIC), Exact Holding (OTC:EXTHF), IFS (on OMX STO), JDA (JDAS), Lawson (LAWS), MICROS Systems (MCRS), QAD (QADI), and Unit 4 Agresso (on Euronext Amsterdam). All except IFS have been involved in recent enterprise software acquisitions already (although it is probably unfair to call rolling Logility back into American an acquisition). All represent very industry-specific ERP plays; Micros - if that name is not as familiar as the rest - is the SAP of the hospitality industry.

The list of acquisitions Piper Jaffray looked at in the same analysis might include some hints as well, although the timing of many of these deals would seem to be suspect, since they even go back to Golden Gate’s 2005 acquisition of Blue Martini. (Wow, that brings back memories, Monte.)

Still the fact that Blue Martini ended up with other old brick-wall retail folks like the guys at GERS is another proof point about the importance of understanding industry centricity in investing in enterprise software. Blue Martini used to tell me they were Amazon (AMZN); I used to tell them they were GERS or NSB (now part of Epicor).

On its list of “current” acquisitions, SoftBrands’ financial advisor could have included some recent Oracle (ORCL) enterprise application acquisitions such as of Adminserver, AVT, GKS and Skywire. I presume the reason none of these deals was analyzed was because of lack of public information given the size of the deals relative to Oracle’s size. But maybe it was so as not to remind the investors of the elephant in the room in all enterprise software merger and acquisition activity.

Source: Struggling Enterprise Software Suppliers Can Choose Their Parties