Baan today said it has received a $US75 million [M] equity boost from Fletcher International Ltd., a private high-technology fund.
Fletcher paid the Dutch-American software vendor $US75 million [M] on December. 31,1998 in exchange for Baan common shares, which Fletcher will purchase between August 1, 1999 and December. 31, 2001, Baan said in a statement today. The agreement also provides for an additional potential investment of up to $US150 million [M] by Fletcher over three years, according to Baan.
The number of common shares, and the price per share, will be based on future stock price movements and will be calculated when the shares are purchased, Baan said. The exercise price will not exceed $US16.00 per share, which will result in a minimum of approximately 5 million [M] common shares.
The deal also gives Baan the right to ask Fletcher to buy $US75 million [M] additional common shares for nine months starting Oct. 1, 1999. If Baan does not fully exercise that right, Fletcher has the right to purchase any unexercised portion during the remaining term of the agreement. Also starting October. 1, 1999, Fletcher has the additional right to purchase another US $75 million [M] in common shares.
Baan saw its share of financial troubles in 1998, posting a third-quarter loss of $US31.7 million [M], or 16 cents a diluted share. Baan's chief executive officer, Tom Tinsley, at the time cited a drop-off in expenditures by large customers, increased competition, global economic turbulence and customers' increased focus on year 2000 problems Tinsley also said Baan realized that the losses were not one-time events.
Baan also expects a one-time charge of approximately $110 million [M] in the fourth quarter of 1998, a result of a firmwide restructuring.