Software AG makes takeover bid for IDS Scheer

The deal would add BPM tools and SOA consulting to Software AG's quiver

Infrastructure software vendor Software AG said Monday it would launch a public takeover bid for IDS Scheer, a maker of BPM (business process management) software.

Software AG said it had reached an agreement to buy 47.68 percent of IDS Scheer's stock from company founders August-Wilhelm Scheer and Alexander Pocsay. Those shares will be submitted as part of a public tender to be made later this quarter by a Software AG subsidiary. The company will offer €15 ($21) in cash for each outstanding share, it said.

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IDS Scheer, based in Saarbrucken, Germany, had approximately €400 million in sales during 2008. The combined company would have more than 6,000 workers and €1 billion in revenue, according to Software AG, which is based in Darmstadt, Germany.

Software AG said the acquisition would lead to growth through sales of the companies' combined SOA (service-oriented architecture) and BPM products, and through IDS Scheer's strength in SAP consulting services.

SOA refers to an IT architecture approach where applications are assembled from various, sometimes-shared services, which may have their roots in legacy systems. In theory, SOA gives IT departments more flexibility and the opportunity to reuse services.

IDS Scheer's core strength is BPM, which is considered complementary to the goals of SOA. BPM tools are used to design, implement, and monitor business processes, such as the series of steps and systems involved in hiring new workers or paying suppliers.

Software AG also has BPM software, in its WebMethods line. It was not immediately clear Monday how that portfolio and IDS Scheer's products will be combined.

Meanwhile, IDS Scheer also has a consulting arm that will help Software AG land SOA and BPM projects, "particularly in SAP environments," Software AG said.

The deal would boost Software AG's position as a large independent player in middleware, which is dominated by IBM and Oracle. Earlier this month, Oracle announced a wide range of new middleware products, including Oracle SOA Suite 11g.

Software AG said it would discuss its announcement in more detail at a press conference Tuesday.

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