CHICAGO -- Ending several months of speculation, Andersen Consulting announced that it had acquired the software products of BancA Corp., Dallas, from Michigan National Corp., Farmington Hills, Mich.
Exact terms of the sale were not disclosed. However, the giant technology consulting firm plans to use BancA's expertise and existing products to develop a new generation of commercial lending software based on client/server archictecture.
"We wanted to position ourselves as the people to turn to" for commercial lending products and services, said Charles McDonough, Andersen's partner in charge of technology for its financial consulting practice.
Mr. McDonough said there has been an upswing in interest among financial institutions to "reengineer and even re-invent commercial lending applications" as they emerge from the crises of the late 1980s.
"the technology needed to effect that change is fairly advanced, and we're also dealing with a tough audience," said Mr. McDonough, referring to the commercial lenders.
Andersen and BancA, along with Microsoft Inc., Redmond, Wash., and Micro/Resources, Corte Madeira, Calif., formed an alliance called the Solutions for Commercial Banking in 1992. But Mr. McDonough said what Andersen wants requires a more concentrated effort.
Access to Resources
Mr. McDonough added that Andersen will work to update the BancA strategy, business processes, work force, and technology.
Andersen will continue to use the BancA name, keeping most of the developer's approximately 20 employees. The new ownership gives BancA access to resources that it has often lacked during its six-year history.
"The expectation of the need for additional investment in our products increased significantly over the past year," said John Cook, chief executive of BancA. Andersen, he added, already has tripled the development budget for BancA's products.
In the past, Mr Cook has said that this company, which was started with investments from Ross Perot and other venture capitalists, has beens strapped for research and development funds.
Mr. Cook said his company has already begun to see the benefits from the new arrangement in the areas of sales and marketing. Consultants from Andersen recently had been informing clients of the impending deal.
Lack of Sales Cited
Slow sales of BancA's products were one reason why Michigan National decided to sell the firm, according to Charles Kight, an executive vice president. Michigan National, with $10.5 billion in assets, purchased BancA in July of 1992.
"BancA's products have been very beneficial for us. We're looking to see the company grow and more into the client/server area," said Mr. Kight. He said Michigan National has been using BancA's commercial lending product since 1989, and has been a client of Andersen Consulting since 1991.
Mr. McDonough said the next generation of BancA software should begin to appear by the middle of next year.