What is noted corporate raider Carl Icahn up to?
With just under 15% of Mentor in his portfolio, Icahn now has turned his attention to an ERP software company called Lawson, of which he has accumulated nearly 11% of its outstanding shares. Does he plan to put the two together somehow?
This Barron’s report suggests at least one market watcher believes the moves aren’t isolated. “He bought at the same time, they’re both software companies and they’re somewhat laggards,” Lon Juricic of StreetInsider.com is quoted as saying. “He’s always known for his activist positions with companies … .”
Well, that seals it, doesn’t it!
Everyone and their dog has an ERP company, of course, and while Oracle, SAP, Infor and Microsoft are the domain of the largest enterprises, the door remains open for smaller, niche companies with tools designed for particular markets. But I don’t see that happening here. Manufacturing is just a piece of Lawson’s business; it’s not the whole focus. And almost every company in electronics manufacturing already has some sort of ERP system in place. It’s an expensive proposition to switch.
And yet, there are some enticing facets to consider.
Lawson, through an acquisition last year, does have cloud computing capability that the industry is trending toward. There is benefit to that capability — see Altium’s recent purchase of Morfik, for example. Also, more EDA vendors are building in purchasing and inventory availability tools to their traditional place and route capabilities. Mentor’s acquisition of Valor aided its ability to track parts from design to placement. Intertwined with a solid ERP system, Mentor could leverage its traditional CAD tools even further.
But there’s the rub, right? At this point, most decent EDA tools talk in some shape or form to the ERP systems. Why reinvent the wheel — and at great risk given this is a (pricey) solution in search of a problem?
I see these moves as singular in nature and unrelated. But it’s still fun to speculate on.