By Mel Duvall

Software AG, a German company recognized as one of the leading providers of middleware and Service Oriented Architecture (SOA) platforms, has secured a deal to acquire IDS Scheer.

The company announced Monday that it has signed a deal to acquire 47.68% of the company's shares from company founder Prof. August-Wilhelm Scheer as well as key stakeholder Prof. Alexander Pocsay. In so doing, Software AG gains control of a business with deep vertical expertise in a number of industries, as well as a strong position in the SAP consulting business.

The move is an interesting play for Software AG, which has been rumored as a potential acquisition target for SAP. SAP is the largest software vendor in Germany, and Software AG is the second largest. While Software AG is based in Germany, the company earns almost three-quarters of its revenues from U.S. operations. In 2007, it acquired leading SOA platform vendor webMethods for $546 million. It maintains a sizeable U.S. headquarters in Reston, Va.

The combined company will now have more than 6,000 employees and $1.4 billion in revenues.

In a statement announcing the deal Software AG said the acquisition is part of the company's growth strategy. "The growth drivers will be increased sales of the combined product offering and specialist expertise of IDS Scheer's consultancy business," it said in the statement. "The consulting expertise is of use for the customer-specific implementation of SOA and business process management (BPM) solutions, particularly in SAP environments."

IDS Scheer is also headquartered in Germany, but like Software AG, earns a considerable portion of its revenues in North America and other regions of Europe. The company was founded in 1984 by Prof. Scheer and has about 3,000 employees. It achieved about $560 million in revenues in 2008. Like many technology vendors, IDS Scheer has seen a slowdown in demand for its software, and instituted cost saving measures earlier this year to trim about $17 million in expenditures. It said, however, that it continues to see strong demand for its consulting services.

The company's flagship product is its ARIS Platform, software to manage a company's business processes with the aim of making them faster and more efficient.

Comments (2)

	1. 07-14-2009 13:08
	This could spark another round of consolidation in the pure BPM product vendor category who are working towards realisation of SOA . Would be interesting to watch what strategies players like Savvion, Pega and Lombardi take over next 12 - 18 months.     Recessionary market not wanting to introduce new IT product or tools may trigger buy-outs Registered

Kumar Gaurav

	2. 07-14-2009 14:29
	The BPM market is definitely ripe for consolidation.     An interesting aside to this acquisition is the fact that Software AG has been rumored as a potential takeover target for SAP. This deal makes them more appealing to SAP as IDS Scheer has a large SAP consulting arm. I don't think we've heard the last of this by any means. Registered

Mel Duvall

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