Quadrant Buys BCD Software

February 10, 2014 Alex Woodie

Backed by the private equity firm Candescent Partners, Quadrant Software today announced the acquisition of Business Computer Design Int’l. and its business partner ExcelSystems Software Development to create one of the larger IBM i software vendors. The companies will continue to operate as they are, no layoffs are planned, and BCD customers will see no immediate changes as a result of the deal, Quadrant CEO Steve Woodard says.

Chicago-based BCD Software and ExcelSystems (ESDI), which is based in British Columbia, Canada, will become entities under the Quadrant brand, joining two other Quadrant companies, SoftBase and NetLert. The combination of BCD and ESDI just about doubles the size of Quadrant, both in terms of the number of customers and the number of employees, the vendor says. There will be about 90 employees in the combined company. The number of customers is unknown (both companies declined to provide specifics), but is likely between 5,000 and 10,000 IBM i shops.

Woodard says the addition of BCD’s modernization solutions is a good match for Quadrant’s existing product lineup, which includes fax over IP (FoIP) and the QuadraDocV document routing platform. But the deal wasn’t just about products, he says.

“I wanted to find a company that was a good fit not just from a product-complementary sense, but also from the point of view of the culture and the manic support and care for customers and concern about employees,” Woodard tells IT Jungle. “Culturally, the whole thing fit really well. So we really pursued them to consider being part of the Quadrant family.”

Quadrant had been pursuing BCD since early 2011, just several months after Woodard took over the helm of Quadrant. Talks continued into 2012 and 2013, and culminated with today’s announcement.

Lynn and Joseph Svandra, who founded BCD in 1976 and have maintained ownership of the company for 38 years, were not necessarily looking to sell, but the deal was too good to pass up, explains BCD’s Eric Figura, who joined BCD in 1979 and has assumed the role of chief customer advocate at the combined company.

The Svandras have been approached many times over the years with offers to sell the company. “It wasn’t started 38 years ago for the purpose of dismantling it,” Figura says. “Joe and Lynn weren’t looking to do anything. We always had a plan in place as to what would happen going forward. But this opportunity came up, and we saw this as a good fit. It gave them an opportunity to enjoy their time.”

BCD customers won’t see any changes, Woodard and Figura say. Going forward, the company is looking at potential product bundles that it can put in place, specifically around BCD’s Catapult product, which Woodard identified as delivering some advanced spool file capabilities that would benefit Quadrant customers. BCD’s Marcel Sarrasin has become the director of corporate marketing for Quadrant, while ESDI founder Duncan Kenzie becomes chief knowledge officer.

Quadrant looked at other IBM i software vendors with modernization solutions, but selected BCD in the end. “We looked at the market. Clearly in our opinion, there are some companies that are bigger. But as far as supporting the IBM i, from a size and product breadth perspective, BCD made the most sense to us,” Woodard says. “We just see this as a synergistic nice complementary fit to our strategy of acquiring companies that help customers get a lot more value out of their applications. It’s as simple as that and as difficult as that. But we’re completely jazzed about this.”

On the outside, the deal appears to have little downside, and the risk of potential disruption to BCD customers appears small. However, there are those acquisitions of IBM i software vendors that have not gone well, including some that resulted in layoffs, slashed R&D spending, and increased maintenance rates.

Woodard bristled when asked if the BCD-Quadrant union would end up that way. “We want customers to be as excited about this as we are, and say, ‘Holy crap, now we’ve all of a sudden got all these resources and other things that we can do,'” he says. “The last thing I want to do when they’re at a theoretical point of inflection is to give them a reason to go away. As you said, I have competitors out there. I have competitors across the board with every one of my products. But I’ve got the best support and the best services on both side of the house. The last thing I’m going to do is something stupid like jack up the maintenance rates so people say ‘Oh, figures,’ and give them a reason to look elsewhere. … We’re buying this company for their success and we intend to grow it and make it more successful.”

For the record, Quadrant could be in the market for more deals. Quadrant’s strategy is to buy technologies or companies that are complementary to its customer base in the market. “If we identify a technology or company that makes sense for us to acquire to keep growing and to our strategy of maintaining legacy platforms, we will look at it and absolutely consider it,” Woodard says.