SMS broadens data management reach with Pelion
- 07 May, 2009 14:31
- Comments 4
ASX-listed integrator, SMS Management and Technology (ASX: SMX), has acquired data management services provider, Pelion Group.
In a release to the ASX, the integrator claimed Pelion would add $6 million in revenue to the SMS business, and that it was acquired for three times historical earnings, with two thirds the purchase price subject to performance over the next three years.
Pelion services include information management, performance management and business management.
In the release, SMS CEO, Tom Stianos said Pelion was appealing due to its synergy benefits and cultural fit, and the consistent revenues and annuity contracts it would bring SMS.
The acquisition is expected to help SMS reach into verticals such as financial services, Government, manufacturing, pharmaceuticals, and transport and logistics.
SMS is enjoying a strong 2009, having announced a 17 per cent net profit increase for the previous six months in February.
Earlier this year, S Central, ComputerCorp and Synergy Plus merged, as the industry continues to see consolidation amongst integrators.
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Comments
Nadia Cameron
picking up skills or customers?
There are a couple of interesting points in this latest acquisition story which I think are indicative of the effects of the economic climate on company M&A mentality.
In the good times, organisations were acquiring to pick up skills in order to cover the multitude of opportunities with their customers. It was about rapid growth and expansion - and don't mind the debt. Now, I think organisations are entering M&A discussions to lower their own company risk.
It's clear from SMS' perspective at least, that getting access into key verticals - including the ones still spending, such as government and healthcare - is a major long-term strategy for them. But I can imagine from Pelion's perspective, that having a secure future within a bigger organisation was a massive influencer for entering talks with SMS in the first place.
Anonymous
things that having a secure future within a bigger organisation was a massive influencer for entering talks with SMS in the first place.
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Anonymous
But I can imagine from Pelion's perspective,<a href="http://www.mustuniversity.com/FreeConsultancy/consultancy.asp">Educational consultancy</a> such as government and healthcare - is a major long-term strategy for them.
Anonymous
I think are indicative of the effects of the economic climate on company M&A mentality.
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