Copyright (c) 2004 Information Today
Abstract: BiblioMondo, a library automation company based in Montreal, has been acquired by ISACSOFT, another Canadian company specializing in e-learning software. They key strategy behind this merger lies in the potentially complementary relationship between the two companies’ business interests.
BiblioMondo, a library automation company based in Montreal, has been acquired by ISACSOFT, another Canadian company specializing in e-learning software. Though not especially well-known in the U.S., BiblioMondo is one of the major players in the worldwide library automation arena. In terms of revenues, prior to its acquisition, BiblioMondo ranked as the 10th largest company in the world of library automation.
BiblioMondo offers two major ILS products: Concerto, with a large base of library customers in Europe, and Portfolio, popular in Canada and France with a few sites in the U.S. BiblioMondo has focused its recent development efforts on a Web-based family of portal and metasearch products called ZONES, which can be used in conjunction with either Portfolio or Concerto.
At the time of this writing, ISACSOFT (TSX: ISF), a public company headquartered in Montreal, was scheduled to acquire privately held BiblioMondo in September 2004 in a transaction valued at roughly CDN $13 million (U.S. $10 million). This acquisition is the latest in a series for ISACSOFT (and the largest in value to date) and increases the size of the company to a market value of about CDN $70 million (U.S. $54 million). Prior to the acquisition, BiblioMondo was a private company with significant investments by venture capital firms. In this deal, ISACSOFT buys out the interests of the private venture capital firms. The founders of BiblioMondo, Jean-Pierre Théorêt and Ian Farquharson, who held equity ownership of the company, are now shareholders in ISACSOFT. The management and operation of BiblioMondo will remain intact, with BiblioMondo management taking senior management positions in ISACSOFT.
BiblioMondo and ISACSOFT, though both involved in technological products and services, have overlapping customers but not overlapping products. BiblioMondo specializes in library automation systems for public libraries while ISACSOFT focuses on interactive learning programs or courseware and translation and localization services for educational institutions, government agencies, and corporations. The key strategy behind this merger lies in the potentially complementary relationship between the two companies'business interests. ISACSOFT sees BiblioMondo as a company that can help it promote its products and services to new market sectors. By virtue of its existing customer base in U.K. and European metropolitan libraries, BiblioMondo gives ISACSOFT's e-learning products and services exposure in new markets.
For BiblioMondo and its customer libraries, the merger with ISACSOFT does not imply a major change in product options and strategy. This situation differs from many of the previous mergers in the library automation arena that involved mergers of direct competitors. When two of these companies merge, the result typically involves the demise of one of the company's products. Such is not the case with this merger. By virtue of joining a larger company, BiblioMondo benefits from increased resources for development, marketing, and support.
BiblioMondo has long attempted to strengthen its presence among U.S. libraries. Previous efforts to market its products south of the Canadian border have yielded only small results, with only about a dozen U.S. libraries running one of BiblioMondo's automation products. The company, however, remains committed to the strategy, and the merger with ISACSOFT may give it some of the momentum it seeks. BiblioMondo has previously stated its intent to enter the U.S. market through a business acquisition. This option remains even more of a possibility with BiblioMondo becoming a part of ISACSOFT, a company that is eager to expand through strategic acquisitions.
ISACSOFT's acquisition of BiblioMondo follows a relatively quiet period in the library automation arena. No major mergers or acquisitions have occurred since the takeover of DRA by Sirsi Corp. in August 2001.
At least two potential acquisitions have been averted. Both SIRS and Gaylord sold their major corporate assets yet retained their library automation divisions. These events might suggest that we live in a business climate where the sellers' valuation of an automation company are not favorable relative to their market value.
Yet, in a broad business climate that favors large companies, the library automation arena continues to be unusually fragmented. The current landscape, where dozens of companies compete within a mere $500 million market, seems destined for some consolidation.
This latest acquisition of BiblioMondo bears similarities to the April 2000 acquisition of Endeavor by Elsevier Science. In both cases, a private company was purchased by a larger public company with interests in a separate but related industry. Elsevier Science, a major publisher of journals in science, technology, and medicine (STM), found Endeavor's expertise in library automation and digital library systems complementary to its business interests. Likewise, it's easy to see affinities between e-learning and library-oriented technologies. As ISACSOFT expands to form a company that offers products and services centered on "knowledge technology," it seems natural that library automation systems (including portal and metasearch products) would be important elements. One of today's key business trends is achieving an increased level of intersection between product areas. Library automation cannot develop in isolation of courseware systems, e-learning environments, e-government infrastructure, and the like. ISACSOFT's acquisition of BiblioMondo reminds us that at least part of the consolidation in the library automation marketplace may come through the assimilation of companies by external industries.
Ronald Brisebois was founder and CEO of COGNICASE, a company that was acquired in a hostile takeover by CGI (Canada's largest computer services company) in January of 2003. At the time of the acquisition COGNICASE had revenues in excess of CDN $500 million (U.S. $385 million) and had about 4,800 employees throughout North America. The acquisition of COGNICASE by CGI was an unsolicited offer that resulted in a larger competitor and eliminated a smaller one in a transaction valued at CDN $347 (U.S. $300 million). At the close of the acquisition, CGI appointees replaced the senior officers of COGNICASE, including Brisebois.
Following the acquisition of COGNICASE, Brisebois launched a new company, which is now known as ISACSOFT, in April 2003. Ronald Brisebois serves as ISACSOFT's president, CEO, and chairman of its board of directors. The purchase of BiblioMondo by ISACSOFT is but the latest step in a series of strategic business acquisitions designed to assemble a company that is well-positioned to compete in various technology-oriented business sectors. In less than 18 months, Brisebois has led the company through seven strategic business acquisitions.
BiblioMondo's corporate history is traced through a number of companies, each related to its original founders, Ian Farquharson and Jean-Pierre Théorêt.
BiblioMondo has both historical corporate ties and technological ties to a company called Speedware. Speedware was founded by Farquharson and Théorêt in 1976 under the name Info-Boutique, which later became Infocentre Corp. The company specialized in the development of industryspecific software applications using its fourth-generation language (4GL) named Speedware. The Library Management Division of Infocentre Corp. created the Best-Seller library automation system and, in 1986, that division was spun off into a separate company called Best-Seller, Inc. Farquharson and Théorêt continue to be involved in both companies. Théorêt serves as the chairman of the board of BiblioMondo and chief technology officer of Speedware.
As part of a larger, growth-oriented company, BiblioMondo is positioned to become a more dominant player in the world of library automation. That world, however, may be nearing the end of the quiet period of company mergers and acquisitions.
|Type of Material:||Article|
Computers in Libraries|
|Volume 24 Number 10|
Mergers and acquisitions|
|Last Update:||2012-12-29 14:06:47|
|Date Created:||0000-00-00 00:00:00|