The sale of its Coda business allows the company to focus on building and improving the integration between its core enterprise resource planning (ERP) software, supply chain management and customer relationship management (CRM) applications, Baan said in a statement.
The Dutch firm bought the financial software maker two years ago in an attempt to target the middle market and add to its ERP applications suite, software that automates a company's human resources, financials and manufacturing needs. Baan paid about $87 million in stock for Coda.
Some analysts predicted Baan would begin selling off its acquired business units, such as Coda and front-office product Aurum, but keep its supply chain management product, Caps Logistics, to help reposition itself as a business-to-business e-commerce software company. Today's move highlights a time of serious change for the struggling firm, as it pushes forward with its larger strategy, announced in early January.
Stephen Palfrey, a financial analyst at New York-based Sanford Bernstein, said the Coda sale was a smart move for Baan and consistent with the company's strategy to reposition itself as a business-to-business player.
"Having Coda gone makes (Baan) more attractive," said Palfrey. "Clearly Coda was not a core to that (e-business) strategy."
Palfrey said Baan still faces a tough road ahead with its business-to-business strategy.
"They have strong products that are fairly well integrated...but it will be difficult for them to make much headway with customers when customers are concerned about their viability," added Palfrey, who has a "market perform" rating on the company's stock.
Since the abrupt departure last month of Baan's former chief executive, Mary Coleman, the company has been faced with tough times, including a huge profit warning, a management shuffle and a plummeting stock price. Baan shares have been trading as low as $7 to $8.
Just days after Coleman left, long-time chief financial officer James Mooney followed. As expected, the company last week reported a full-year net loss of $289 million, in line with analysts' expectations.
Under the terms of today's deal, Science Systems, a business consultancy that focuses on procurement and finance systems, said it will pay approximately $50 million in cash for the assets and operations of Coda. Baan said it expects to report a gain of approximately $30 million based on the transaction.
The head of Science Systems, Graham Steinsberg, will also head the Coda division within Science Systems.
The proposed deal is subject to customary closing conditions with a target date for completion before the end of March, the companies said. Other terms of the agreement were not disclosed.