Imtech Buys Reseller Real Solutions for U.K. Expansion
June 9, 2008 Timothy Prickett Morgan
For all the intense competition in the server and storage space, it is still a pretty good business that, despite the technical training required and tough sales environment, yields plenty of profits for many of the players who peddle IT gear. Of course, the bigger the reseller, the better, since size usually brings breadth as well as depth of coverage. And that is why Dutch IT, communications, and engineering conglomerate Imtech has decided to buy Real Solutions, an IBM systems resellers that has a large presence in the United Kingdom.
Real Solutions, for you students of IT history, was a subsidiary of leasing and reselling giant El Camino Resources, which was huge in the mainframe and midrange leasing market in the 1980s and 1990s and eventually topped $1 billion in sales. (El Camino is still around and still does some equipment financing, but like its chief rival, Comdicso, which is no longer around, its fortunes went south when the dot-com bubble burst and the mainframe market collapsed at the same time.) Real Solutions was an arm’s length subsidiary and was eventually spun out of El Camino to be a free-standing company.
Today, Real Solutions is based in London and Manchester, one being the financial center of the United Kingdom and the other being a big industrial center, and has become one of the dominant resellers of IBM’s System i, System p, and System x product lines (now known as Power Systems and Modular Systems), as well as BladeCenter blade servers, related storage, IBM’s Rational development tools, and Vision Solutions‘ various high availability and disaster recovery products for the System i and IBM’s HACMP clustering for AIX boxes.
According to a statement put out by Imtech, about 60 percent of Real Solutions’ sales in the past year came from the selling of and consulting for the installation of IBM systems, with 20 percent coming from sales of IBM software and the remaining 20 percent coming from other IT and communications services. Real Solutions has 400 customers, 100 employees, and had sales of £32 million (around 46 million euros) in 2007. The only reason why Imtech said anything about this is because it is a publicly traded company and it wanted to demonstrate that the Real Solutions deal was a good one.
Imtech is based in Gouda, The Netherlands, a town whose famous cheese is probably a lot more familiar to Americans than Imtech. Imtech is both an electrical engineering and mechanical engineering firm, and has a strong telecommunications and IT practice in Belgium, Germany, Luxembourg, Spain, the United Kingdom, and of course in its home market, The Netherlands. The company has over 200 offices in Europe, and has over 14,000 customers.
By comparison to Real Solutions, and even the old El Camino Resources, Imtech is huge, having 18,000 employees and annual sales of 3.35 billion euros; it brought 91.9 million euros to the bottom line, which is not a huge amount of profit, but the company has boosted sales from just over 2 billion euros in 2004 (66.5 percent growth between 2004 and 2008) and nearly tripled net income (from 36 million euros in 2004) as it grew. Whatever Imtech is doing, the numbers are heading in the right direction. (It is too embarrassing to me as an American to convert those financial figures to U.S. dollars, wink, wink. OK, just multiply by $1.56 and do it yourself.) Imtech’s shares are traded on the Euronext Amsterdam stock exchange and are part of the Amsterdam Midkap and Next 150 indices that track business in Holland and Europe, respectively. Despite its strong sales, the company’s shares all add up to a market capitalization of about 1.5 billion euros, or half of the company’s annual sales rate. It would seem that Euronext investors want a lot more euros to drop to the bottom line.
The company’s Imtech ICT division, which Real Solutions will be rolled into and which focuses on IT and communications gear and software, posted sales of 209 million euros last year and is one of the largest so-called ICT companies in Holland and Germany. The company’s Fritz and Macziol unit, which operates in Germany, Austria, and Switzerland, sells IBM’s Power, X64, and mainframe servers as well as storage, the entire IBM software stack, as well as Microsoft‘s Dynamics NAV (formerly Navision) ERP software for Windows platforms. The company also sells its own software suite for financial services companies, called Infoma, which runs on X64 platforms. The Imtech ICT division operates as the brand in the Netherlands, and another unit, called Imtech Telecom, generated 62 million in sales to mobile and land-line telephone operators and service providers in the Netherlands, Belgium, the U.K., and throughout Scandinavia.
In its announcement of the Real Solutions acquisition, which did not include the price that Imtech paid to acquire the British company, Imtech said that it saw lots of growth in this ICT field, and that it was expanding in Europe to build up its relationships with IBM and Microsoft. Having already established strong partnerships in the Netherlands, Germany, Austria, and Switzerland, Imtech is doing acquisitions to build out in other European countries, with the United Kingdom, Spain, and Belgium being the initial target markets for expansion.
To that end, Imtech has also acquired Information Technology and Trust, a Swiss tech reseller and consultancy that specializes in implementing the Dynamics NAV suite from Microsoft.