Invensys to shed assets, including Baan

Longsuffering Invensys this week unveiled plans to offload more than half of its remaining business units, including its Baan software division.

The London-based conglomerate, which provides software and systems for controls and automation equipment, says it’s shedding the holdings in its core energy-management division to reduce debt. As a result, Baan – which offers enterprise resource planning (ERP), supply chain management, customer relationship management and production lifecycle management products – will be changing hands for the second time in three years.

Once considered a competitor to ERP giants SAP, PeopleSoft and Oracle, Baan lost its momentum in 1999 amid declining revenue and management turnover and was facing possible bankruptcy before Invensys acquired it in May 2000.

Baan spent its time under Invensys focused on developing products that would be most valuable to manufacturers, said Kelly Spang Ferguson, principal analyst at Current Analysis, in a research brief. Baan’s new Web services platform – code-named Gemini – is nearly complete, and Baan will be ready to roll out its next ERP application later this year, Ferguson said.

While it’s too early to tell what the latest news means for Baan and its installed base of 6,500 customers, since Baan’s purchaser is unknown, “it may be good for Baan to move out from the shadow of Invensys and the weight of Invensys’s crumbling financial picture,” Ferguson wrote in a brief.

AMR Research expects Baan’s fate to be decided quickly. “Baan will have a new home by summer, we are certain. In the meantime, users should continue with their plans,” wrote AMR Research analysts John Bermudez and Randy Weston in a brief. “Baan is a solid product and a valuable property; no matter who gets it, it will still be taken seriously and not bled dry of declining maintenance revenue until it can be shut down.”

Likely Baan suitors include SSA Technologies, PeopleSoft or a venture-funded group taking Baan private, according to Bermudez and Weston.

In addition to Baan, several other holdings in Invensys’s energy-management division are on the block. They include Appliance Controls, APV Baker, Climate Controls, Hansen Transmissions, Lambda, Metering Systems, Powerware and Teccor. Combined these units posted revenue of $4.55 billion for the 12 months ended in March 2002.

Invensys will retain its production management and rail systems businesses. The company’s production management offerings are aimed at helping customers in the process, hybrid and discrete manufacturing industries improve the performance of their production assets and supply chain processes. The rail systems business provides signaling, train management, automation, safety and control products for mass transit infrastructure.