US-based ActivCard has acquired Australian ISV, Protocom, for $US21 million to grow its presence in the identity management market.
The deal was prompted by growing customer demands rather than a desire to buy out the competition, Protocom CEO, Jason Hart, said.
"Acquisition was not something we were looking at, but mutual customers basically told us that we should work together," he said. "We looked at partnership, but then the synergies between the businesses made acquisition obvious."
Protocom produces single sign-on software for enterprises. Under the new deal, ActivCard will gain access to its list of 600 major organisations including British Telecom, OEM partner, Novell, and strategic partner, IBM-Tivoli. In return, Protocom will leverage the vendor's backend systems to reduce operating expenses while also gaining access to its 1000-plus customer base.
Both companies have also undergone a restructure as a result of the acquisition, with nine Protocom and 30 ActivCard staff being shed. Hart has been appointed to ActivCard's board of directors as senior vice-president of sales and marketing.
Hart said Australian ICT companies were increasingly good investments for global players but more work needed to be done to support local ISVs that wanted to go international.
"We need to see greater access to cheap capital in Australia as that is a fundamental barrier to growing businesses here," he said. "The US has access to cheap capital and that's why organisations are able to grow beyond the sizes commonly seen here."