FRANKFURT - Germany's Software AG said it will bid 15 euros in cash per share for IT consultancy group IDS Scheer and has agreed to buy out the two biggest shareholders that control nearly half the company.
The combination of the two successful business models is expected to be accretive to Software AG's operating earnings per share already in the first full fiscal year of consolidation (2010), Software AG said in a release late on Monday.
The tender offer represents a 39 percent premium to Monday's closing price of 10.80 euros per IDS share.
The Darmstadt-based software vendor said founder August-Wilhelm Scheer contractually agreed to accept its offer for his entire stake of 41 percent, as has co-founder Alexander Pocsay, who owns a further 7 percent.
Software AG plans to issue a comprehensive statement on Tuesday at 0500 GMT at the same time as an analyst conference, it said. A conference call with reporters is scheduled later for 0700 GMT.
The transaction will create a global vendor of infrastructure software and Business Process Management with more than 6,000 employees and more than 1 billion euros ($1.39 billion) in sales, the company said. Revenue for IDS Scheer was 399.1 million euros for 2008.
Software AG's strengths, technology leadership in middleware products, financial strength and global presence, will be supplemented by IDS Scheer's skills in the analysis and mapping of business processes, the strong partner network and the large service presence in their approx. 7,500 customers.
IDS Scheer said in a separate statement that it had allowed Software AG a limited due diligence after conclusion of a memorandum of understanding on July 7.
The offer is subject to a few conditions, in particular antitrust approval.
August-Wilhelm Scheer has in the past ruled out a sale of the company he founded in 1984, but told a German magazine late last year a disposal was a possibility if it could not boost profitability.
This is my life's work, Scheer said at the time. He had repeatedly dismissed rumours German software giant SAP was in talks to buy IDS Scheer. (Reporting by Christiaan Hetzner; editing by Carol Bishopric)