Softchoice Corp. has made its third acquisition in three months -- this time bolstering its hardware technology solutions and services business by buying up Optimus Solutions for $38.1 million (U.S.) in cash. But after this the spending spree should slow down as Softchoice shifts its focus to integrating all of its new purchases, according to the firm's president and CEO David MacDonald.
In an investor conference call on Thursday, the Toronto-based technology provider outlined the terms of the deal, which includes a deferred payment of up to $9 million, payable in 2008 depending on the financial performance of Optimus. Funding for the transaction was provided by a loan from a Canadian chartered bank, and the acquisition is expected to close this week, subject to normal closing conditions. The transaction is expected to close before the end of the week.
Privately-held Optimus, based in Norcross, Ga., has nine U.S. offices, and in the past 12 months has raked in $140 million in revenue, with approximately 87 per cent of that coming from hardware sales, MacDonald said. With the acquisition, "we have successfully rounded out our offerings across all product market segments," he added.
One of the things that made Optimus an attractive target was its expertise around IBM mid-range servers and Cisco Internet solutions. While HP is currently one of Softchoice's leading vendors, "we have not done as well with (IBM) in the U.S.," said MacDonald. The acquisition will enable Softchoice to "expand into a market we're not currently playing in." Overall, it will bolster Softchoice's capabilities in areas such as internetworking, server consolidation and security solutions in the U.S. mid-market, enterprise and public sector.
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