Copyright 2002, Traffic World, Inc.
Collaborative manufacturing applications provider QAD acquired TRW's Integrated Supply Chain Solutions unit for $1 million cash. QAD acquired all of the unit's assets, including TRW's AIM Warehousing software and customers, which are 90 percent QAD customers as well, said Wendy L. Allen, company spokesperson for QAD. The deal closed Nov. 12.
TRW ISCS covers 10 European countries and North America. The unit had been a QAD alliance partner. The acquisition expands QAD's infrastructure in the Europe, Middle East and Africa region, which represent nearly 40 percent of the company's total fiscal 2002 revenue, said Allen. "It enables us to get closer to our customer, especially in the Europe/Middle East/Africa region. Now these customers have direct access to QAD," she said. The acquisition also adds offices for QAD in Belgium, Portugal, Spain and Switzerland, said Allen.
QAD "has been committed to the EMEA market since we were founded," said Allen. There are no plans for further acquisitions at this point, she said.
QAD expects TRW ISCS to generate annual revenue of between $13 million and $15 million and to be accretive to earnings by the second half of fiscal 2004, said Allen. The company paid and will incur transaction and integration costs of approximately $4 million to $5 million, she said.
The TRW ISCS transaction included the purchase of the stock of BDM UK Ltd. and its 13 European subsidiaries, the acquisition of assets and assumption of certain liabilities of the businesses in Germany and North America, and TRW Systems' agreement not to compete in Europe for the next three years, said Allen.
Separately, QAD announced that it expects its fiscal 2003 third quarter to exceed its previously reported financial guidance. Previous estimates were for revenue between $42 million and $46 million and a loss of between nine and 19 cents per diluted share, excluding charges related to the company's cost-reduction program.
"Based on preliminary estimates, QAD expects total revenue to be in the range of $47 million to $48 million, with anticipated license revenue ranging between $13 million and $14 million. QAD also achieved significant savings from aggressive implementation of a cost-reduction program announced in August. These factors are expected to result in earnings of six to 10 cents per diluted share, excluding a special charge of approximately $3 million, or nine cents per diluted share, related to the cost-reduction program," said a spokesperson.
Final operating results will be released Tuesday, Nov. 26. QAD is based in Carpinteria, Calif.