GEAC Aquired by PE Firm

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In early November it was announced that software company GEAC is being acquired for $1 billion by private equity firm Golden Gate Capital. Many of you will doubtless remember GEAC as a consolidator of software companies in the construction industry several years ago, having acquired Concord, Marathon, Jonus & Erikson, and several others.  Even with its development of the StarBuilder application-GEAC’s effort to build a migration platform for contractors who were on older construction platforms-the company had failed to reach its larger objective of competing successfully in the construction software industry. Too, one of GEAC’s largest shareholders, Crescendo Partners, had been highly critical of the company’s acquisition strategy and its pace of integration.

Unfortunately, neither the construction industry nor StarBuilder was mentioned in the press release on this recent transaction. And, according to Golden Gate’s web site, the construction industry does not appear to be an industry vertical this equity group focuses on either. In conjunction with Explorer’s recent acquisitions, Best’s acquisition of Timberline, and Maxwell’s somewhat new outside ownership, many lower- to mid-level software products for the construction market are now owned by people from outside the industry. What they hope to bring to their respective customers is a question I am sure is on the mind of everyone.

Neither is the upper end of the market necessarily a safe haven-as the customers of formerly independent J.D. Edwards have learned. All of which means that constant awareness and appraisal of ownership changes in the construction industry software market is necessary to guide strategic thinking and assure software support.