Dublin enterprise IT solutions firm System Dynamics will have a turnover in excess of €15m in 2004 as a result of today’s all-cash acquisition of the e-business division of Connect Global Solutions.
The deal will also see System Dynamics become one of the largest IBM e-business partners in the country. All of Connect’s e-business customers will become customers of System Dynamics as a result of the acquisition. System Dynamics’ customers are mostly in the financial services and government sectors and include AIB, Allianz, Eagle Star, The Courts Service, Department of Agriculture, EBS and ESB.
System Dynamics managing director Tony McGuire told siliconrepublic.com that the deal will see 10 staff from Connect move this week to System Dynamics’ headquarters in Ringsend, resulting in a combined operation with a workforce of 85 people.
The sale of its e-business solutions division will leave Connect Global Solutions free to concentrate solely on its software localisation business and its localisation technology.
McGuire said that under the terms of the deal he was unable to reveal the acquisition price, but said that it was funded mostly by cash reserves with the remainder coming from borrowing.
He explained: “The space that Connect works in is very complementary to ours, the e-business solutions space. We do the same things but they have a different set of customers, so there is very little overlap. They were our single biggest competitor in this space. It is an interesting thing to combine two companies that were both IBM e-business solutions partners.”
The deal is the first acquisition System Dynamics has made since it pulled out of a merger two years ago with Californian company, Anna Technology. McGuire said: “Obviously it moves us up the food chain and is good news for our customers because customers are looking for bigger, better stronger suppliers, with greater confidence and lower risk, offering more comprehensive solutions to bigger customers.”
McGuire added that the company is hoping to soon start expanding into some overseas markets, notably the UK and Europe. “We have made some preliminary sorties into these markets and expect it to accelerate,” he said.
System Dynamics has enjoyed consistent revenue growth over the past five years, with turnover increasing eight-fold from €1m to €8m. The company was acquired in 1996 by Tony McGuire and his business partner Connor McWade.
By John Kennedy