Microsoft to acquire Great Plains Software
- — 22 December, 2000 10:16
Each share of Great Plains common stock will be exchanged for 1.1 shares of Microsoft common stock, according to a joint release. Great Plains stock price was $US35.31 on the Nasdaq exchange at the market's close Wednesday. Like many technology stocks, the company is down significantly from its 52-week high, $US83.50 in January.
The stock took a fall in heavy trading Tuesday after issuing its second-quarter earnings report. The software company said net income and diluted earnings per share for the quarter, excluding the effect of amortisation of acquired intangibles, was $US4.2 million -- lower than the $US4.6 million in the same quarter last year.
Great Plains itself has acquired several companies in the last year, expanding its product base. It bought RealWorld a developer of accounting and business solutions, for $US5.5 million in cash in January; financial reporting software specialist FRx Software and human resources and payroll software company PWA Group, in February; and business software rival Solomon Software, in May for about $US140 million in cash and stock.
The merger will extend Great Plains' global reach, allow a tighter integration of technologies and lend the company Microsoft's market strength, said Douglas Burgum, president of Great Plains Software, in a conference call Wednesday. Great Plains will become a separate division within Microsoft's Business Application Division.
An industry watcher called Microsoft's purchase significant.
"It points to a sea change in that industry," said Sarwar Kashmeri, publisher and chief executive officer of ebizchronicle.com, an online daily business newspaper. "Great Plains typified the top of the line in accounting software that appealed to mid-sized companies."
Pressure from Oracle in accounting application services and a desire to lessen dependency on the Windows platform prompted Microsoft's move, he said.