Agresso to acquire CODA?

In a regulatory statement made on its website, CODA said:

Coda plc (“CODA” or the “Company”) announces that on 18 December 2007 it received an indicative approach from Unit 4 Agresso N.V. (“Unit 4 Agresso”) at 205p per ordinary share in cash for the entire issued and to be issued ordinary share capital of CODA (the “Approach”). The Approach is subject to a number of pre-conditions including the satisfactory completion of due diligence and financing.

The Board of CODA considered the Approach and concluded that a limited due diligence exercise should proceed. This exercise is at an advanced stage. There is no guarantee of any offer being made for the Company. Were such an offer to be made it is expected to be funded by Unit 4 Agresso’s existing cash balances and debt finance.

Together, CODA and Unit 4 Agresso would create one of Europe’s top ten business software vendors*, with turnover in excess of €300m (based on 2006 published figures) and operations in nineteen countries.

I have reason to believe this approach may well be consummated. The language of the release is certainly not hostile and I do know there is a reorganization under way which is seeing – how shall I put it – some odd changes that would not otherwise make sense.

Assuming the deal does go ahead then it makes sense from both parties’ perspective. They are both strong in public sector though I’d argue that CODA is stronger in certain verticals that Agresso has not managed to penetrate. A combined operation would also help Agresso when it comes up against Oracle in certain markets. Of course nothing is final until cheques are exchanged so we will have to wait and see.

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