14 June 2002 Troubled software vendor Peregrine Systems has secured a $50 million (€52.7m) loan and plans to sell its supply chain enablement division to a private equity company Golden Gate Capital.
Peregrine has been dogged by accounting issues in recent weeks. In May, the asset management software vendor announced that it would restate its financial accounts for the past two years when its then-auditors KPMG uncovered irregularities in the way Peregrine recognised revenue.
During the period in question, Peregrine had been audited by the discredited account firm Arthur Andersen.
But days later, Peregrine sacked KPMG after discovering that $35 million (€37.7 million) of the questionable $100 million (€108 million) came in historic sales to KPMG’s consulting arm. Four key executives, including Peregrine’s CEO and chief financial officer, resigned as a result.
The financial details of the sale of its supply chain enablement business were not disclosed. By selling this division, Peregrine is losing a number of core business-to-business (B2B) applications, including catalogue management, B2B content management and portal software.
In the past, analysts have criticised Peregrine for its confused software portfolio, which it built up by acquiring a series of companies, a number of which it has since re-sold at a steep loss.
News of the loan lifted Peregrine’s shares by a fifth at the close of business yesterday. Peregrine must begin repaying the loan from February 2003.
Peregrine, the unfolding story:
Peregrine cans second auditor over accounts (29 May 2002)
Peregrine restatement to cost $100m (24 May 2002)
Peregrine: $100m revenues “called into question” (7 May 2002)
Ex-Peregrine worker arrested over leak (15 January 2002
Peregrine Systems issues new profit warning (4 January 2002)