Baan Exec -- Invensys is Our 'Perfect Partner'

SAN FRANCISCO (05/31/2000) - It was smiles all round at troubled ERP (enterprise resource planning) software vendor Baan Co. NV as the company today confirmed the identity of its buyer -- U.K. automation and controls group Invensys PLC.

As Baan's rescuer from financial woes and an uncertain future, Invensys has offered to buy the ERP vendor for US$709 million in cash.

In ebullient mood, Katrina Roche, Baan's senior vice president and chief marketing officer, talked to IDG News Service today in a phone interview about the company's new owner and its likely future under the Invensys umbrella.

IDGNS: So is today's announcement good news for Baan and its customers?

Roche: It's great news for Baan. If we sat and thought about our perfect partner, we would've come up with Invensys. It's very good news for our customers. Invensys has said it will continue to support the Baan code base and take it forward onto the Net. That says to us that the Baan product has a future. People were starting to question that.

IDGNS: How did Boeing Co. (Baan's largest U.S. customer) react to the news?

Roche: We told them last night before we signed the deal. They were extremely pleased for us. They had been somewhat concerned about the future of our product set and having someone to continue to develop it.

IDGNS: How long had Baan and Invensys been in negotiations?

Roche: We've been working for six weeks now. We were really looking for someone who will continue to maintain Baan's technical leadership and would be a strong investor in R&D (research and development).

IDGNS: Did you look at how Invensys has handled the acquisition of ERP player Marcam Solutions Inc. last year?

Roche: Absolutely. We didn't just look at Marcam, we looked at a number of acquisitions Invensys has made. Wonderware Corp. was losing $9 million annually and, in less than a year, Invensys has turned them around so they're making a $30 million net profit. With Marcam and SIMSCI (Simulation Sciences Inc.), Invensys has positively reduced losses both the companies had. Invensys has a strong track record of taking struggling companies and making them relatively successful.

IDGNS: Analysts speculated today that Invensys is likely to spin off Baan's CRM (customer relationship management) software and its Caps Logistics business.

What's your take on that?

Roche: It's difficult for me to comment on what Invensys may do. The CRM business is becoming more and more critical in terms of how you supply demand in no time flat. Invensys has encouraged us to work on our business plans in relation to CRM and we will review those plans jointly.

IDGNS: Prior to today's announcement, was Baan planning to take its newly created e-CRM spin-off public?

Roche: That was the plan in March. The value of our e-CRM business was lost in the greater portfolio at Baan. Looking at the market capitalizations of standalone CRM companies, we thought we'd take it public, probably on Nasdaq.

IDGNS: What about Baan's overall restructuring plans?

Roche: In 1998, the management of Baan said that they wanted it to be a $2 billion company and built up the cost structure for that, however revenue was not where they wanted it to be. There was not enough cash to do a restructure.

Though it was clearly in order, we lacked the cash to do it.

We would've announced Monday a $60 million program of restructuring, the writing was on the wall to bring the cost structure of the company under control. With Invensys, we can now be much more thoughtful about the restructure. We're still working on the restructuring elements. Invensys has allocated $400 million for the restructuring of Baan.

Baan, with dual headquarters in Barneveld, the Netherlands, and Reston, Virginia, can be reached at +31-342-42-8888 or at +1-703-234-6000, or on the Internet at http://www.baan.com/. Invensys, based in London, can be reached at +44-207-834-3848 or on the Internet at http://www.invensys.com/.

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