Geac Computer has agreed to acquire Extensity in a deal that will bring together two vendors of enterprise management software, the companies said in a statement on Monday.
Geac's board of directors has unanimously approved the deal and recommended its shareholders vote in favour of it. The deal is expected to close in October or November, according to Elizabeth Ireland, senior vice president of marketing at Extensity, in Emeryville, California.
Extensity shareholders can choose to receive either Geac shares or cash in exchange for their Extensity stock. Depending on which option shareholders choose, the deal is estimated to be worth between $US46.2 million and $47 million.
Extensity makes software for procurement and for managing employee services such as expense reports, time cards and travel planning. The acquisition would add those offerings to Geac's line-up, which includes financial administration and human resources software, ERP (enterprise resource planning) software and industry-specific applications. The deal follows a strategic alliance signed by the companies in June.
Geac, in Markham, Ontario, will invest in the current Extensity platform and use it as the foundation for extending its enterprise offerings, according to the statement. In addition, Extensity customers will benefit from Geac's global resources and infrastructure.
After the deal closes, Geac plans to become more efficient by eliminating some corporate administration costs, according to the statement. Whether that move will involve layoffs has not yet been determined, Ireland said.
Shares of Extensity closed at $US0.95 on the Nasdaq on Monday, up nearly 22 per cent. Geac (Toronto Stock Exchange) closed at $C4.55, up about 3 per cent for the day.