Chuck Stewart Explains Rationale for Made2Manage Acquisition of Encompix ETO ERP

Released on = May 12, 2006, 7:23 am

Press Release Author = Roger Meloy

Industry = Software

Press Release Summary = Chuck Stewart Explains Rationale for Made2Manage Acquisition
of Encompix ETO ERP

Press Release Body = On Monday, March 13, 2006, Indianapolis-based Made2Manage
Systems, Inc. completed its acquisition of Encompix, Inc. The acquisition was
Made2Manage Systems' fifth during the past 20 months. When one software company
acquires or merges with another, there are primarily three assets involved, the
product(s), the customer base, and the employees. In the past many of these
acquisitions involved product consolidation, massive layoffs, and customers left
with an obsolete product with little hope of any major investment. So why is the
acquisition of Encompix by Made2Manage different? Chuck Stewart, one of original
co-founders, answered in a recent interview.

"There were several factors that contributed to our decision to sell Encompix. Going
back a couple of years, Dave Warford and I realized that, at some point, Dave was
going to leave the business due to his age, either to retire or pursue other
opportunities. Initially, I planned to purchase Dave's shares outright. But we soon
realized that the company would have to take on major new debt to buy out one of the
principle shareholders. That new debt structure would have resulted in an unhealthy
financial environment for the company. At that point, we decided to look at the
market opportunity for a merger or acquisition with a larger company. We were
thrilled that 12 companies expressed an interest in Encompix. We picked three
companies with which we had significant discussions, and eventually we chose
Made2Manage Systems. Avoiding an unhealthy debt structure was the first business
reason behind the decision. The second reason was from a new systems sales
perspective. We always thought that Encompix should be part of a larger software
company, mainly because of the types of clients we attract. It seemed that every
year we got involved with one or two large sales opportunities. We did very well at
the plant level and often ended up vendor of choice after the evaluation. The
stumbling block was when our proposal went up the corporate ladder and reached a CIO
or CFO. They would look at the size of Encompix and find it difficult to justify the
investment based on the potential risk. We've always believed that being part of
a larger company would give us the financial strength to overcome these objections
and win larger value sales. From a business perspective, the revenue from one or
two larger sales each year makes a considerable difference in how we were able to
run the company, especially our ability to reinvest in the product, offer new
technology, and add people. We wanted to be part of a very stable financial
environment for our customers as well. Our customers are very important to us, and
we wanted to ensure that we could support them, as well as move forward with
investments in new technology that will enable them to use Encompix for life."

Encompix (www.encompix.com) a business unit of Made2Manage Systems, has filled the
manufacturing software requirements of engineer-to-order companies since 1992. The
company name reflects a commitment to developing business application solutions that
encompass the complex areas of project-based and job-based manufacturing. Encompix
provides ETO manufacturers with a competitive advantage by improving bottom line
results.








Web Site = http://www.encompix.com

Contact Details = Melissa Stahley
Made2Manage Systems
(317) 249-1270
mstahley@made2manage.com
www.made2manage.com

Roger Meloy
Encompix Inc.
(513) 733-0066, ext. 13
rmeloy@encompix.com
www.encompix.com

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