Struggling business applications vendor Geac Computer Corp. Monday announced plans to chop its workforce by about 12% in an attempt to return to operating profitability by next month and prime itself for a potential sale.
William Nelson, who was named Geac’s interim CEO two weeks ago after predecessor Douglas Bergeron resigned, said during a teleconference that he expects to start receiving offers from prospective buyers late next month. The company could be sold off as a single entity or split into pieces, he added.
Nelson wouldn’t guarantee that any deals will result but said he hopes to have a potential buyer or buyers lined up by early February. He noted that Geac has gotten caught in the “carnage” of the boom-and-bust nature of the applications business and attributed the company’s problems in part to lengthening software purchasing cycles on the part of users.
Toronto-based Geac owns the former Dun & Bradstreet Software company, one of the big second-tier vendors of enterprise resource planning (ERP) applications. Geac went on a buying spree last year, acquiring specialized ERP vendor JBA Holdings PLC and Clarus Corp.’s financial and human-resources software business.
But Geac ran into troubles this year, reporting a US$44.3 million loss from continuing operations in its first fiscal quarter ended July 31. Shortly thereafter, the company said it had hired investment banking firm Lazard Freres & Co. LLC as a financial adviser.
During yesterday’s teleconference, John Caldwell, who became Geac’s interim president and chief operating officer at the same time Nelson took on his current role, said the company plans to offset slow sales by eliminating 150 jobs through attrition and handing out 350 pink slips by the end of the year.
Most of the cuts will involve administrative employees or come from JBA Holdings, Nelson said. He added that Geac is no longer focusing exclusively on becoming an ERP giant that could challenge the likes of SAP AG and Oracle Corp. in the applications business.
