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J.D. Edwards buy keeps customers in mind

The software maker agrees to buy Youcentric for $86 million, hoping to target companies wanting to build closer relationships with their customers.

J.D. Edwards announced an acquisition Wednesday that would bulk up its software tools for companies wanting to build closer relationships with their customers.

The enterprise software maker said it agreed to buy Charlotte, N.C.-based Youcentric for $86 million. Youcentric makes collaborative customer relationship management (CRM) software, which allows companies to coordinate sales campaigns and automate their relationships with customers.

Denver-based J.D. Edwards plans to buy privately held Youcentric in exchange for J.D. Edwards common stock and cash. The mix of common stock and cash will be determined upon closing, which is expected to be in 60 to 90 days, subject to regulatory approval.

The acquisition gives J.D. Edwards the ability to gain ground on its competitors in the enterprise resource planning software industry, including SAP, Oracle and PeopleSoft. All of these companies have been trying to find ways to knock Siebel Systems from its throne atop the market.

By adding Youcentric technology, J.D. Edwards hopes to deliver a set of combined collaborative applications that let companies electronically manage their business relationships.

J.D. Edwards, like its rivals, is looking to take a piece of the multi-billion dollar market for customer resource management software. Industry research firm IDC estimated this week that the market for the software soared 84 percent to $6.2 billion in 2000. By 2005, IDC is expecting companies in the industry to generate $14 billion in revenue.

The importance of customer relationship management software and its potential for growth is highlighted by J.D. Edwards' decision to buy Youcentric amid tough economic times, one analyst said.

"Despite the current economic downturn, end-user organizations continue to rate (the software) as critical to their organizations' ongoing business strategy," Mary Wardley, an IDC analyst, said in a statement.