The announcement follows a raft of merger and acquisition deals this year including Freecom.net’s acquisition of Pegasus and Systems Union, Invensys buying Baan and Sage taking over companies including CSM and Hartley International.
Experts believe rationalisation in the market is set to continue due to the high number of vendors which have suffered poor results this year, while there has been growing concern there are too many companies competing against each other – leading to confusion among buyers.
Dennis Keeling, BASDA chief executive and former Damgaard director, said: ‘This is a great move for the two companies as it will give them a wider product range and a full international presence. The software market is contracting and we are likely to see an awful lot more of these announcements in the near future.’
The merger – which is still subject to the agreement of shareholders, who meet on 21 December – has produced a company called NavisionDamgaard with revenues of DKK1.2bn (£96m), with Navision set to own a 72% stake.
Navision’s Waldemar Schmidt is likely to be appointed chairman of the new company, with Hans Werdelin of Damgaard acting as deputy chairman. Navision’s Jesper Balser and Preben Damgaard will be named joint chief executive officers.
‘The merger between our companies is natural because we can stop competing against each other and instead focus on creating a strong global company for the mid-market. By merging the two companies, we achieve a size and a market position that enables us to participate actively in the current international consolidation in the industry,’ said Jesper Balser.
NavisionDamgaard said all of its core products will be retained. It is believed The Navision Financials suite will be rebranded as Navision Solutions, while Damgaard will continue to sell the XAL and Axapta products.
The companies’ joint statement to the Copenhagen stock exchange said the merger was ‘intended to create an even stronger international provider of integrated business solutions with the strength to participate in international industry consolidation’.
The savings resulting from the merger are projected to be £11m in the first year.
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