Apps player Infor aims at $3B business within 12 months

Midmarket applications vendor Infor Global Solutions shows no signs of satisfying its hunger for gobbling up its peers in the hopes of becoming a US$3 billion business within a year.

Infor's most recent purchases of SSA Global, Extensity and Systems Union (SU) in August raised the firm's annual revenue to $2.1 billion, putting Infor firmly in third place sizewise behind market leaders Oracle Corp. and SAP AG.

Infor intends to continue acquiring in a bid to boost annual revenue to $3 billion within 12 months and to $4 billion over the next two to three years, according to Jim Schaper, Infor chairman and chief executive officer.

"We will continue to look for supplementary acquisitions in verticals in which we under perform or which are greenfield [for us] like retail and the public sector," he said in an interview Monday. Currently, Infor focuses on meeting the needs of distributors and discrete and process manufacturers across a number of verticals, with emphasis on the automotive industry.

Infor is also interested in making purchases to expand its presence in Asia-Pacific, particularly in mainland China, Schaper said. The company's geographic revenue split is 50 percent from the Americas, 41 percent from Europe and 9 percent from Asia-Pacific.

Any future acquisitions could range from a low end of around $100 million to "much larger," Schaper said. Although he declined to comment on specific targets, he said that Infor is having plenty of conversations with companies the vendor could potentially buy. "The M&A [mergers and acquisitions] landscape has never been as active as it is today," he added. Infor also has access to plenty of capital as it's funded by private equity firm Golden Gate Capital. Infor is comfortable as a private entity and Schaper hopes the company holds off going public for the next two years.

The key to any potential purchase is a lack of overlap with Infor's existing product portfolio, Schaper said. In all its acquisitions, the company has tried to limit overlap of products as much as possible.

Since its founding in 2002 as Agilisys, focused on providing process manufacturing and distribution software, the privately held vendor has bought more than 18 companies. Those purchases have enabled the company to both grow its number of customers to 70,000 as well as widen its product portfolio to include back-end applications such as ERP (enterprise resource planning), CRM (customer relationship management), asset management and analytics software. The company changed its name to Infor in 2004.

Infor derives 50 percent of its revenue from software maintenance, according to Schaper, who cites a 95 percent customer retention rate. Professional services and license revenue each account for 25 percent of total revenue. With the addition of SSA, Extensity and SU, around 75 percent of Infor's sales are direct to 25 percent from channel sales.

Infor is currently honing its Open Service-Oriented Architecture (SOA) strategy and will release details and begin delivering offerings in December or early January 2007, Schaper said. For SOA integration between different Infor products, the technology will be free. Infor will charge "a nominal licensing fee" to customers looking to use the SOA technology to integrate Infor software with third-party applications, he added.