Speaking to Accountancy Age Paul Coleman, CEO of Systems Union Group, said the terminating of dot.com activities was necessary in order to make ‘freecom.net a business of substance, not just one of virtual substance.’
Coleman said the changes would take the company ‘out of retailing and e-tailing for SMEs and the volatile dot.com market’ and allow them to ‘focus on their core business of financial and accountancy software’.
This followed Systems Union’s announcement that it had sold freecom.net GB plc (previously called Oneview.net plc), the e-commerce solutions company it acquired in 1995, to its freecom.net management for a negligible fee.
This arrangement included the agreement to pay £1m for a call option to acquire shares in the management buyout company.
The £1m will be injected into freecom.net and be used to finance restructuring costs and meet working capital requirements.
Systems Union also announced the sale of Potential Development Limited to its management for a nominal fee, the closure of freecom Training and Consulting, and the end of investment activities by freecom Ventures.
In May, Oxford-based e-commerce company freecom.net acquired 80% of Systems Union in a deal valued at £31.9m. Systems Union became part of the freecom.net Group, with freecom.net becoming its parent company.
Freecom.net Group planned to build a hosting business around Systems Union Sun System’s applications, as well as increase the Group’s activities abroad. In addition the Group benefited from Systems Union’s substantial e-commerce resources.
Freecom.net first move into the accounting software arena came at the beginning of 2000, following the acquisition of rival accounting software specialist Pegasus. The £55.5m deal followed a bidding war with Australian software group Solution 6 in February.
Shares in Systems Union this morning rose by 25% on the back of positive expectations for its first-half results released next month. Investors in internet chat rooms have also been speculating that the company may sell Pegasus.
According to financial wire service Bloomberg, Systems Union is worth £63m at the current price.
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