Calyx picks up Moss on acquisition trail


2 Jul 2003

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UPDATE: Calyx, the voice and data services provider, has bought the network maintenance and service company Moss Technology for more than €5m and plans to buy again, possibly before the year is out.

When the Moss deal has bedded down, Calyx will turn its attention to buying another IT reseller, possibly in the fourth quarter of this year. “On the computer side there will be at least one further acquisition in Ireland for us to do,” said Calyx managing director Maurice Healy. “On the voice side, we intend to do something there. We’ll finish what we set out to do in Ireland and then look at England. We’ll tackle the UK towards the end of next year.”

Healy said he was prepared to consider all possibilities, even buying a large indigenous rival. “There’s nothing here that we wouldn’t look at,” he told siliconrepublic.com. “What we have to look at is something that’s going to increase our recurring revenues in the space we’re in and that offers synergies and real benefits.”

The Moss acquisition is primarily a move to increase Calyx’s market share, according to Healy. “The deal’s not particularly about skill sets,” he said. “There’s no massive difference in customer or services profile, but we will be taking the best practices of both… the combined services business is massive now.”

The aggressive strategy echoes Calyx’s origins when it was part of the ITG group; the company made 16 acquisitions in four countries between 1993 and 2001. Now, Calyx is a group of four companies, formed after Healy led a management buyout of the technology services arm of ITG (now Alphyra) two years ago. Calyx Data, Calyx Training and Calyx Voice were all previously part of the ITG Group. The current structure is rounded out by a fourth entity, Calyx Bespoke, a new venture that specialises in consultancy and project management. The group offers services nationwide from offices in Dublin, Cork and Limerick.

Formed almost 20 years ago, Moss Technology specialises in supporting, maintaining and installing wide and local area networks. It has offices in Dublin and Cork.

As a result of the deal, Moss cofounder and MD Ken Roe is to take up a key role within the newly combined company. Moss employees will also move from their company’s current city centre location to the Calyx headquarters at the North Ring Business Park in Santry, a process due to be finished within 10 days. Healy emphasised the need for the integration to take place quickly, as this would improve the chances of success of the merger.

Combined, the new group will employ approximately 200 people; its expected turnover is estimated at close to €60m, based on current run rates of business. Calyx will contribute around €49m, with Moss delivering the remainder. Healy pointed out that this apparently low figure is explained by the fact that Moss Technology does not sell hardware, which can inflate revenue figures but is not hugely profitable. The bulk of the latter’s turnover is in maintenance and services, which yields considerably higher margins.

The move marks another step in the consolidation that is taking place within the indigenous IT channel, as companies adapt to tough trading conditions and reduced technology spending in businesses. Last year the enterprise technology provider SSI was acquired by UK firm Morse and the Dublin-based security provider Priority Data is now part of the Unit 4 Agresso group. Earlier this year Maurice Cohen, owner of Emcee Distribution, bought fellow distributor Midia.

By Gordon Smith