Lawson to target Europe and NHS
September 25, 2006
Lawson to target Europe and NHS. Check it out:(Business, The (London) (KRT) Via Thomson Dialog NewsEdge) Sep. 24--US-based Lawson Software, the third largest business software developer in the world, is planning more acquisitions in the UK and Europe after its recent $480m (253m, E369m) takeover of Swedish software company Intentia.
Lawson is also aggressively pitching for lucrative back-office software contracts in European markets such as the UK, Germany and France and has already started talks with the UK's National Health Service (NHS).
In an exclusive interview with The Business, Lawson president and chief executive Harry Debes revealed the US-based software company is already talking with a shortlist of potential takeover targets in Europe.
"Financing further acquisitions will not be a problem for Lawson. The banks are throwing themselves at us asking how much we want to borrow. If we wished, we could borrow north of a $1bn and we already have $300m in cash."
But he added that it is important for Lawson and Intentia to merge successfully before embarking on another major acquisition. According to Debes, there will be little rationalisation of the US and Swedish software companies as their operations are entirely complimentary. Lawson is a US-based enterprise resource planning (ERP) company specialising in service companies while Intentia is a Sweden-based operation specialising in ERP for manufacturing.
But Debes intends to use Intentia's 2,500 customer base, which is mostly in Europe, to sell Lawson's niche healthcare and local government software. Around 95 percent of all Lawson's business is in the US, where it claims to dominate its niche.
"In the US, we have 4,500 hospitals. No one, not even [German software giant] SAP, comes close to us in the healthcare space," said Debes.
Like many US-based companies, Lawson's first foray to Europe was in the UK because English is spoken. The company signed a contract with Nuffield Hospital and Lawson is now understood to have begun talks with the NHS.
According to Debes, the savings ERP software can offer the healthcare industry are huge. It believes it can drive down cost by supply chain management. "Around 70 percent of purchases are specific to health care and the global suppliers of hospital equipment are often the same as those used by US companies," said Lawson vice president Dean Hager. "We can realise huge cost savings in this area."
ERP software also handles other back-office functions such as human resources.
"It is vital in areas such as healthcare that the ERP software is designed to match the needs of the industry in which it is used," said Hager. "While it is true that all companies need to hire people, the criteria between one industry are very different. For example, that used for hiring nurses is totally different from that used in the construction industry."
According to Debes, back-office ERP is needed to manage all hospital resources including operating theatre slots and the number of beds available at any one time.
The company intends to use the in-house language expertise developed by Intentia to break into new markets outside the UK and the US.
"Previously, Lawson used an outsourced language service to help translate our products for foreign markets," said Debes. "This was not ideal as this approach often fails to take full account of the cultural differences involved."
But Intentia had developed its own in-house translation capabilities, which Lawson believes will enable it to translate its products, currently available in five languages to 10-20 languages including Chinese and Japanese. Following the merger, more than half the company's revenues are outside the US.
According to sector analysts, the company is following a global trend in software where firms tend to address global industries rather than national markets. Instead of specialising in providing software to the US or the UK, developers are now starting to address narrow business niches on a global basis.
Debes predicts that this strategy will enable Lawson to increase its annual revenues from $389.6m to $1bn in 2009, irrespective of planned acquisitions.
To see more of The Business, or to subscribe to the newspaper, go to http://www.thebusinessonline.com.
Copyright (c) 2006, The Business, London
Distributed by McClatchy-Tribune Business News.
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Related Tags: according debes, Lawson, lawson, software, business, Debes
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