CA sells business apps subsidiary

Computer Associates International Inc. has at last decided to sell off ACCPAC International Inc., its software provider for small- to medium-sized businesses.

CA Tuesday announced the buyout, worth an estimated US$110 million, saying it’s expected to clear regulatory hurdles by February. The buyer is the U.K.-based holding company The Sage Group PLC, whose Best Software Inc. subsidiary also provides business software to the low end of the market.

The spinoff has been in the wings for some time, as ACCPAC’s core focus has been different from that of parent CA, whose main role is as a provider of enterprise management tools, said David Hood, president and CEO of ACCPAC. He noted the company has been functioning largely as an independent unit and had been expected to be spun off via a public offering. That plan was postponed because of the downturn in the IT market.

Islandia, N.Y.-based CA last year sold off its other business applications unit, InterBiz, to SSA Global Technologies Inc.

The ACCPAC acquisition will deliver to Sage a variety of applications, including human resources, CRM, warehouse management, manufacturing and accounting software. It also inherits more than half a million users and 7,000 channel partners, along with a hosted offering.

The resellers are perhaps the major factor in this transaction. “The single largest key success in small and medium business market is the channel,” Hood said. That applies both for the larger companies, such as SAP AG and the combined J.D. Edwards & Co./PeopleSoft Inc. duo, as well as smaller companies looking to get greater traction in the marketplace.

The combined Sage/Best/ACCPAC family will have more than 4 million companies as customers for cross-selling purposes.

Geography is another selling point. The buyout will give Sage an entry into places such as Canada, where it currently has no presence, said Best CEO Ron Verni. It also makes up for the lack of a hosted suite, allowing Irvine, Calif.-based Best to fend off online-only rivals such as Inc. or NetSuite Inc.

Currently, the only online tool offered by Best is an accounting application that has had little market success thus far, Verni said. On the technology side, ACCPAC also offers a suite that’s fully integrated from the front-end CRM applications to the back-end accounting ones.

No product lines are being considered for phaseout, said Verni, who also didn’t give a specific date for when a technology or integration road map would be unveiled. “We see unique possibilities for each product,” he said.

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