Only two weeks after announcing the $2.1 million purchase of PKF Technology software group, the cashed-up accounting software vendor Solution 6 has outlined a proposal to acquire Canadian document and knowledge management specialist PC DOCS Group International.
The proposal comes as a surprise considering that recent discussions on the possible acquisition of Solution 6 by PC DOCS were terminated less than two weeks ago with NASDAQ-listed PC DOCS deciding not to proceed with the take-over.
But Solution 6 CEO Chris Tyler believes that "the acquisition of PC DOCS encompasses a range of synergies that offer significant growth potential for both organisations".
In fact, he claims a successful merger between the two companies would create the world's largest document and knowledge management market player, whose combined specialisation in the legal and account-ing industries could bring in an estimated $250 million in revenues this financial year.
In sharp contrast to Tyler's enthusiasm, PC DOCS officials have voiced strong disapproval of what Darren Adams, managing director of the company's Australian operation, describes as an "unsolicited and opportunistic bid.
"I wouldn't call it sour grapes, but it does seem a bit opportunistic of them to make this bid," he remarked.
"I mean, we've reviewed for 12 months the possibility of buying them and a week after they got a letter from our Board saying that we'd decided not to proceed, they put through an unsolicited bid to our company."
As a publicly listed company, PC DOCS is nevertheless under obligation to officially consider the proposal, but Adams believes Solution 6 faces an uphill battle to have the proposal approved.
"It is likely that our Board of Directors will make a very swift decision and, in consideration of the fact that we've rejected buying them - that merger will probably not go ahead."
Last December, PC DOCS board of directors took only three days to review and reject another unsolicited bid made by its competitor Open Text.
Hinting at the probable outcome of the Solution 6 proposal, Adams said the rejected bid was higher than Solution 6's unofficial offer of 4.35 of its shares for every PC DOCS share, based on Solution 6's $1.67 closing share price on January 29.
Yet, according to Richard McLean, Solution 6's general manager for marketing and sales, the software house was "cautiously optimistic", believing that with Solution 6's shares hitting a new high of $2.75 on the ASX, the offer will appeal to PC DOCS shareholders.
However, Adams sees the situation in a different light.
"After Open Text made their offer to buy PC DOCS, their share price went up quite substantially. It is interesting that Solution 6's share price has gone up as well. So, maybe [the proposal] is a bit of a ploy by Chris Tyler to help the share price," he said.