Computer Associates International (CA) named a former investment banker, Michael Christenson, to the new position of executive vice president for strategy and business development. The move indicates that CA's overhauled management team is keeping an eye out for acquisition opportunities.
Christenson, 46, retired last year from Citigroup Global Markets after a two-decade career in investment banking. Christenson's past roles at Citigroup include stints as the bank's head of global technology investment banking, and of global media investment banking. At CA, he will report to Chief Operating Officer Jeff Clarke. Christenson will lead corporate planning and strategy and direct alliance, merger and acquisition activities, CA said in the statement announcing his appointment.
CA's recently named chief executive officer (CEO), John Swainson, who formally assumed that position last week, has been rebuilding a management team wiped out by an accounting scandal that forced the resignations of a number of CA executives. Islandia, New York-based CA grew big through the 1990s with an aggressive acquisitions strategy focused on industry consolidation, but Sanjay Kumar enforced a buying hiatus when he took over as CEO in 2000. Kumar left the company last year, and was later indicted on charges related to the accounting fraud.
Swainson has sent signals he thinks it's time for CA to go shopping again. Before Swainson's appointment, CA did two recent acquisitions, buying identity and access management software maker Netegrity (for US$430 million) and antispyware developer PestPatrol. In a recent staff memo, Swainson wrote, "Consolidation is a key driver in the technology industry today; the competitive landscape is changing fast."
Financial analyst Kevin Buttieieg, of AG Edwards & Sons in New York, said he sees Christenson's appointment as a sign that CA is exploring M&A (mergers and acquisition) activity.
"My sense is that most of the acquisition they would do is along the lines of the Netegrity acquisition -- something that size, and that takes them from a product area they have in the mainframe to a similar product in the distributed computing market," Buttieieg said. "But I do think there's potential for them to do larger acquisitions."
CA still carries significant debt from its earlier buying binge, and has had to rebuild investor trust in its finances shattered by a scheme that led to US$2.2 billion in premature revenue bookings in 2000 and 2001. Still, Buttieieg said the software company has progressed to the point where it can again consider M&A opportunities.