Lawson and Intentia delay merger up to three months

Lawson Software and Intentia International will have to wait a bit longer for their planned union. The two applications vendors said this week that they are extending the deadline by three months for completing their planned merger, a deal the companies hope will give them the bulk needed to become the dominant vendor in the midmarket ERP (enterprise resource planning) software.

Lawson, with headquarters in St. Paul, Minnesota, announced in June that it would buy Intentia, based in Sweden, in an all-stock deal valued at around $480 million. Although Lawson will survive as the name of the combined company, the deal is essentially a merger of similarly sized vendors. Lawson had revenue of $335 million in its last fiscal year (ended May 31); Intentia had revenue of SEK 2,983 million ($379 million) in its most recent year (ended Dec. 31).

Lawson originally expected to close the acquisition this year, but on Thursday it announced a revised termination date for the deal, extending the deadline from Jan. 31, 2006 to April 30.

A Lawson representative did not immediately return a call seeking comment, but the company said previously that converting Intentia’s financial statements from Swedish accounting standards to U.S. ones was taking longer than expected. Lawson is still waiting for approval from the U.S. Securities and Exchange Commission of its merger registration documents.

Wall Street analysts aren’t viewing the delay as a cause for concern. In addition to the international accounting issues, Lawson’s difficulty contacting enough Intentia shareholders, many of whom are individuals, to reach a quorum is contributing to the deal’s extended timeline, SG Cowen & Co.’s analysts wrote in a research note. They still expect the deal to close next year.

Lawson and Intentia both make sales, financial, accounting, human resources and supply-chain management applications aimed at midmarket customers, generally companies with up to $1 billion in annual revenue. While Lawson does most of its selling in North America, Intentia focuses on the European market. The companies hope that combining their operations will create a larger, more international vendor better positioned to compete with top-tier ERP vendors like SAP AG and Oracle Corp.