Theme: 20 Years of Remedy ARS – How did we get here? (Part 2)
Introductions by Doug Blair/Quick Review by Dan Bloom
Three founders, Larry Garlick, Dave Mahler, and Doug Mueller
In part 1 of this article I discussed the backgrounds of the Remedy founders, how they came together to build a successful customer-centric company, and how well business was doing going into the late 1990’s.
Back in 1991, before the first version of the AR System was released, Peregrine Software, led by John J. Moores made a buyout offer – mostly in attempt to keep the AR System off the market. However, as during most of Remedy Corporation’s existence, the board saw greater opportunity in continuing Remedy’s “organic growth” and refused the offer.
Meanwhile, anyone who was around in 2001 remembers how the focus was on growth, not profitability. And few companies were growing faster – a sustained 25% per year – than Peregrine Systems. (This, despite a general slowdown in the industry, that was on it’s way to becoming the the dot-com meltdown.)
But in 2001 Moores made another offer, one that Garlick and the board couldn’t (legally) refuse. At $1.2 billion in cash and stock Moores was almost doubling the company’s valuation.
It was a crazy offer, but Remedy was having their share of difficulty. They had their first unprofitable quarter during this time and suffered through a painful round of layoffs. And Garlick himself had been looking for his own replacement for six months.
No one was happy with the deal, but Remedy Corporation became part of Peregrine Software on June 11, 2001. Larry Garlick stayed on as a member of the board of directors to help protect the interests of Remedy customers, and employees.
Peregrine then went on to become a poster-child for the meltdown, loosing more that $400 million in shareholder equity with 15 people indicted, and 11 serving jail time.
In late 2002 as part of the bankruptcy proceedings, Remedy was sold to BMC Software for $355 million.
In an odd bit of irony, it turns out that John J. Moores was one of the original founders of BMC Software.