Magazine article American Banker

Hogan Systems Inc. Hires Morgan Stanley; Software Firm for Sale?

Magazine article American Banker

Hogan Systems Inc. Hires Morgan Stanley; Software Firm for Sale?

Article excerpt

Bank software firm Hogan Systems Inc. has hired Morgan Stanley & Co. to explore "strategic alternatives" for the firm, company officials said last week.

Hogan executives said in a terse statement released Wednesday that it has tapped the New York-based investment bank "as its financial adviser for the purpose of evaluating strategic alternatives to maximize shareholder value."

The hiring of Morgan Stanley could be interpreted as a prelude to a possible sale of Dallas-based Hogan, said Richard X. Bove, an analyst with Raymond James & Associates in St. Petersburg, Fla.

"Presumably one of these alternatives would be the sale of the company to an entity with greater capital resources than are currently available to Hogan," Mr. Bove said.

Hogan officials flatly declined to comment on Mr. Bove's speculation of an imminent sale or even what possible outcomes were being considered.

Mr. Bove cited several reasons why he thinks the time is ripe to sell Hogan, which was founded in 1977 and markets integrated core accounting systems to the nation's largest banks. Most of its software runs mainframe computers from International Business Machines Corp.

Hogan has "turned itself around" after some weak sales quarters in 1994, Mr. Bove said. "Its new product array is in the marketplace, and Hogan has made some important sales to First Interstate and Huntington Bancshares, suggesting that its earnings are in a significant uptrend."

Mr. Bove also cited what he called a "renaissance of the mainframe business," enhancing Hogan's attractiveness to potential suitors. …

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