TMT Blog – April 2008

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This month we have seen clear signs that the global technology M&A market has so far remained resilient in 2008 despite fears of a slowdown and the effects of the credit crunch.

Having sold technology businesses to both Australian and Japanese bidders in the last couple of months ourselves it is interesting to note that more than half of mid-market disposals in the technology sector this month have been to overseas buyers, many from the US. So despite the tough environment it seems clear that those bidders with significant financial strength and deal-doing experience, the likes of EDS and EMC, will continue to see significant opportunities in the UK market this year.

Deals completed in the UK

Clearwater Corporate Finance has advised Allen & Heath, a leading designer and manufacturer of audio mixing consoles for professional sound engineers, live sound installations and DJs on its sale to Japanese-listed business D&M Holdings. Allen & Heath is the second business that Clearwater has advised on a transaction with D&M, owner of the Denon and Marantz brands, having already advised Calrec Audio on its sale in September 2007.

UK listed defence and aerospace systems supplier Cobham plc has completed the acquisition of MMI Research Limited for a consideration of £16.6 million. MMI provides specialist cellular telecommunications capabilities to law enforcement, military and intelligence agency customers worldwide and will become part of Cobham’s Avionics and Surveillance division.

Clearwater Corporate Finance has also advised Bowmark Capital on their acquisition of Datix Limited. Datix develops and supplies risk management and patient safety software to the healthcare sector and is the market leader in the UK with software installed in more than 70% of NHS hospitals. The investment will enable Datix to enhance its existing products as well as to adapt the software for use as a risk management tool in other sectors.

Comptel Corporation, a Finnish provider of solutions to telecom service providers announced that it has acquired UK-based Axiom Systems for a cash consideration of £7 million with a further earn-out dependent on the business achieving sales of more than €10.5 million in 2008. Axiom provides a software product focused on the broadband fulfilment market and the transaction forms part of Comptel’s strategy to become the world leader in end-to-end Operation Support Systems (OSS) for communication operators and service providers.

US-based Radiant Systems, a provider of IT solutions to the retail and hospitality industries announced that it had acquired UK-based Hospitality EPoS Systems, a provider of systems to the hospitality sector for the last 16 years. The acquisition offers Radiant the opportunity to accelerate its development in the UK market.

UK provider of fulfilment solutions for the broadband cable industry, Jacobs Rimell, has been acquired by US business Amdocs in a £23 million transaction. The acquisition demonstrates Amdocs’ continuing strategy of extending its leadership in the OSS market and builds on its previous acquisitions of DST Inovis Inc and Cramer Systems Group Limited.

EMC Corporation, a US leader in storage and infrastructure solutions announced an offer to acquire UK business Conchango in a £42 million deal. Conchango specialises in the design, development and delivery of custom applications and digital experiences for clients such as Tesco, Virgin Atlantic and SKY and the acquisition should enhance EMC’s position in the UK market.

Global outsourcing giant EDS Corporation has acquired UK firm Vistorm Holdings Limited for an undisclosed consideration. The business will continue to operate as a stand-alone entity with its original management team in place but will benefit from being able to leverage EDS’ existing IT infrastructure, security and privacy capabilities.

French software and services business Sword Group has completed the acquisition of Scottish CRM provider Graham Technology plc in a deal which was reported to be worth approximately £30 million. Graham Technology has made sales of its ciboodle customer interaction software suite in 12 countries across five continents.

US customer service software developer FrontRange Solutions announced the acquisition of UK-based Centennial Software for an undisclosed consideration. Centennial provides a range of dynamic infrastructure management products including auto-discovery, inventory management and license management solutions.

The boards of Avnet, a US technology distributor and Irish competitor Horizon Technology Group plc, announced that they had agreed a recommended cash offer by Avnet for the Horizon business valuing it at €101.3 million. The acquisition enables Avnet to accelerate its growth in the UK and expand its geographic coverage into Ireland.

Other Deals

CompuGROUP Holding AG, the German-based business which was ultimately outbid by Australian group IBA Health in the protracted battle for iSoft announced that it plans to acquire Norwegian software development business Profdoc ASA. CompuGroup remains acquisitive and keen to look at opportunities in the UK and across Europe.

Indian IT consulting and services provider Satyam Computer Services announced that it will acquire Belgian business S&V Management Consultants for $35.5 million. S&V is a supply chain management consulting business with offices in Belgium and the Netherlands which develops supply chain strategy and performance, and supply chain process excellence solutions for manufacturing and pharmaceutical companies.

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