DTR Software International Inc., a pioneer in computer software for plastics companies, has been sold to another enterprise software firm, Made2Manage Systems Inc., in a deal that was a closely guarded secret for eight months.
The sale creates a manufacturing system giant that weds the 1,700 customers of Indianapolis-based Made2Manage with that of the more targeted, 200 plastics-specific customers of DTR, based in Jacksonville, Fla.
The two companies perform similar computerized services for customers, including order entry, financial management, collecting shipping and receiving data and customer-service functions.
Terms of the deal were not disclosed.
Made2Manage will retain about two-thirds of DTR's workforce, said Jerry Staddon, vice president of development for Made2Manage. Yet, the DTR name already has vanished, and the name of DTR's core product, Manufacturing Manager, will be converted into a Made2Manage system.
But he said DTR customers will feel no side effects.
Made2Manage will continue to operate DTR's systems, and customers will not be forced to merge products or move them to a Made2Manage product, Staddon said. However, the combined firm may offer some services that DTR customers did not have previously, he said.
``The big key is to fold the company into our organization completely,'' Staddon said Aug. 19. ``We're not running DTR as a separate division. Instead, we gain seven new developers in Jacksonville who are all folded into our organization and give us more software expertise and ongoing support.''
For most of the past decade, DTR and fierce competitor IQMS of Paso Robles, Calif., have fought for enterprise-software supremacy among plastics users. DTR started in 1983, when personal computers were just coming out, and IQMS was founded six years later.
There have been verbal battles and even lawsuits between the two. But even so, IQMS was taken by surprise by the sale of DTR, said Terry Cline, executive vice president of the California competitor. Made2Manage took eight months to work out the purchase agreement in private, Staddon said.
IQMS might have been interested in buying DTR, if it had known the company was for sale, Cline said. However, any buyer will have a challenge melding the software systems of two companies with differing languages, he added.
``Two companies cannot easily put two [enterprise resource planning] systems under one roof,'' he said. ``You have to double your support and programming staff. You can't do it on a technical level without quite a bit of rewriting [of code].''
However, by letting DTR's software remain in place under the Made2Manage name, the company hopes to connect the two in language and data gradually, Staddon said. As it is, both Made2Manage and DTR offered similar service over 70-80 percent of their products, he said. And they serve similar markets: manufacturing companies with annual sales between $5 million and $50 million, he said.
The changing environment for computer systems might have forced the sale. The growth in ERP systems has slowed since the mid-1990s, when companies were installing new products at a furious pace, Staddon said. Today, many companies are mainly looking for upgrades or more minor changes.
For DTR, the company might have hit a wall on growth, Staddon said.
``From my perspective, DTR had grown to a size where the organization had to make a change internally to grow any larger,'' he said.
Made2Manage had gone through those changes already. In the mid-1990s, the company hired a new chief executive officer and changed its support system, Staddon said. Then, last year, the formerly publicly held company - with sales at the time of close to $30 million - was taken into private hands by venture capital firm Battery Ventures of Wellesley, Mass.
Battery Ventures paid about $30 million for Made2Manage in June 2003, and the company decided to look for niche acquisitions.
Made2Manage already has many customers in industrial machinery, fabricated metals, rubber and furniture and fixtures, Staddon said. Even before the acquisition, the company had about 100 plastics-oriented customers, he said.
``It's amusing as a side note that we competed against DTR for some customers,'' Staddon said. ``Some would go back and forth on various products. The key difference was the way we handled production.''