A Calgary-based systems integrator said its recent acquisition of Edmonton-based Bellamy Software Ltd. will allow it to go after the public sector markets outside of Alberta.
Sylogist Ltd. on Tuesday completed its acquisition of Bellamy three weeks after it initially announced it would acquire for $3.5 million in cash and $500,000 in Sylogist shares.
Bellamy was bought from its parent company, Nor-Dat Computer Services Ltd., which also owns three MicroAge locations and U.S.-based PARCS Software. Bellamy will retain its Edmonton offices and 26 employees and is now a division of Sylogist. Bellamy software was originally acquired by HTE Inc. of Orlando Florida in 1996 and its application was branded under the name of HTE-CitySoft until its acquisition by Nor-Dat in 2001.
Dan Hinchey, president and CEO of Nor-Dat and managing director of Bellamy, said his parents, who founded Nor-Dat over 30 years ago and are the majority shareholders in the company, were looking for a succession strategy for their businesses. In addition to the Bellamy sale, Nor-Dat will shut down its MicroAge offices in Yellowknife and Whitehorse this month.
“There’s been a lot of stuff happening in the evolution of what’s going on in the MicroAge side of the business in small towns as to whether or not that was as exciting as it was 10 or 20 years ago,” said Hinchey. “All of this was coming to a head at one time. We were looking at what’s the next step for the family business. Sylogist approached us and the discussions made a lot of sense so that looked after a large portion of the family business.”
Hinchey, along with Ken Shelton, general manager of Bellamy and Mike Paradis, chief architect of Bellamy will continue in their roles as Sylogist employees.
With strong economies in cities like Fort McMurray and Yellowknife and shrinking margins in the computer channel, it was difficult for Nor-Dat to keep the MicroAge offices going, said Hinchey.
“At one time that business was supplying $10 million a year in Yellowknife and Whitehorse and now it’s down to a couple million,” he said. “It was at a time when you typically bought from a computer reseller locally. That’s changed dramatically. Margins have changed dramatically. The business has become a much different animal. We had 18 staff at one time in Yellowknife and this year we’re down to three.”
MicroAge is a franchise of Hartco, one of Canada’s largest franchisors of system integrators and technology resellers.
Bellamy develops data management software that combines AS 400, DB 2, Web Sphere Java and RFG platforms. Sylogist develops and implements managed services, data and application integration and mobile apps based on SAP technology.
“We’re looking at evolving the products we’ve got, products that we build and collaborating on opportunities that those companies will be targeting because we both look after local government,” said Hinchey. “Now we have an SAP solution and a home grown Canadian solution.”
Bellamy’s customers include over 60 municipalities, 16 school boards and five regional utilities. Bellamy’s customer base was one of the reasons why Sylogist initially approached them a few months ago, said Dave Elder, vice-president of corporate development at Sylogist.
“(Bellamy) has a well-regarded software platform in largely the Alberta municipal space, which is a space we’ve become fairly prominent in because of our relationship with the Alberta Urban Municipalities Association,” said Elder. “It’s a customer base that was right in our wheelhouse.”
The combined annual operating budges of the public sector customers exceed $2 billion, according to the firms.
Elder added that Sylogist was also attracted to Bellamy because of its staff’s expertise in serving the municipal customer base.
“(The acquisition) further solidifies Sylogist as a significant player in the municipal space and also in school board space where Bellamy has a presence and utilities,” said Elder. “We’re a real player now having acquired a business that’s very active in that place. We’re well capitalized and financed being a public company and looking to grow.”
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