Acquisitions are a priority for Software AG next year and the company is most likely to look for targets specialising in integration software in mature markets, its chief executive said.
Karl-Heinz Streibich told Reuters in an interview that Software AG - which specialises in mainframe computer modernisation and so-called service-oriented architecture (SOA) software - did not rule out a large buy if it was a good fit.
"You can't plan big take-overs," Streibich said on the fringes of an industry event on November 28. "We have shown that we can do it and we have the means," he added, referring to Software AG's $546 million take-over of US-based webMethods.
Streibich said Software AG would likely try to grow its business organically in emerging markets. He reiterated that Software AG, which is 29 percent owned by a foundation, saw itself as a buyer rather than a target in the fast-consolidating enterprise software market. Software AG's position is strengthened by its early entry into the now-fashionable SOA arena, which helps companies knit together different software systems, preserving valuable legacy software, Streibich said.
Streibich said companies had no option but to modernise their mainframes and improve the way their legacy software performs, regardless of the wider economy.
Software AG aims to reach the upper end of a targeted range of 30 to 35 percent sales growth this year and expects to increase revenue by 22 to 25 percent and raise its operating margin to about 23 percent next year.
Last year, before it bought webMethods, Software AG made sales of 483 million euros ($712 million) and operating profit of 111 million euros.