«

»

Dec 23 2007

Print this Post

CTSpace put to the Sword

Just 53 weeks after its last major ownership change, SaaS construction collabaration technology vendor CTSpace (the result of a merger between UK-based BuildOnline and US-based Citadon) has been acquired by the international Sword group of IT companies (as far as I can tell, no value for the transaction has been given). The news came in a low-key announcement made late on the last Friday before the Christmas holidays. CTSpace CEO Howard Koenig is quoted:

“We anticipate that this move will underpin the future growth of CTSpace and build upon our success over the past few years. CTSpace will be able to utilize the Group’s resources to accelerate its product roadmap and maximize its geographic reach through the Group’s vast international experience and track record of technical expertise in ‘best of breed’ IT solutions. … Aligning ourselves with SWORD will give us the opportunity to leverage the Group’s presence into new geographical markets and support our clients’ multi-national interests.”

The release continues to explain how the acquistion will boost Sword’s SaaS interests:

“… the acquisition will enhance SWORD’s range of offerings to the Group’s existing markets and clients. As a leader in this field, we will also provide SWORD with the opportunity to review its hosted and licensed software offerings to see where else within the Group a SaaS delivery model may be applicable.”

A Sword news release summarising several transactions says CTSpace’s software is “dedicated to large scale projects for the Oil, Gas and Engineering markets and inter-related sectors. Its backlog [order book, I think] comes to €21m [£15m]. This acquisition increases our yearly pro-forma revenue by €11m [£8m] and will consolidate our local operations.”

The £8m figure has some significance as it was figure that Koenig gave a year ago (see post) for combined revenue to year-end June 2006 – so there has apparently been no growth since then.

Sword group

The Lyon, France-based Sword group is an international IT products and services company founded by Jacques Mottard in 2000, which has grown rapidly through a series of acquisitions, mainly but not exclusivly focused on electronic content management (ECM) solutions, including:

  • Fircosoft – a US automated payments vendor; Decan and IDL, both UK-based EDMS vendors, plus GIS specialist IDP (all in December 2000)
  • UK change management consultancy DDS UK and French funds transfer specialist Profiler (April 2001)
  • UK-based Text Solutions, another EDMS vendor (April 2002)
  • Benelux-based data management business Cronos Technologies (December 2002)
  • US financial services solutions vendors Zen and Art, and Belgian web content management business FI System (December 2003)
  • Global, an India-based offshore business based in Chennai (May 2004)
  • UK-based EDMS vendor Cimage (July 2004) – a business I got to know well during the late 1990s when I managed PR for the Tarmac Professional Services division (see below)
  • Stellon and Real Time Engineering (2006)

Alongside Mottard, Sword joint CEO from 1 January 2008 is Welshman Heath Davies, who joined the company following the acquisition of Text solutions in 2002, having previously been with Cimage. However, I know Heath from earlier times.

I first met him in the mid-1990s when he was a project manager with Schal, then part of Tarmac Professional Services (TPS) – today, part of Carillion. Heath’s responsibilities included development of a rudimentary electronic document management system, PIMS (project information management system), employed on the London Royal Opera House redevelopment, among other projects (see 1995 Contract Journal article). He didn’t stay with Schal, however, moving within the TPS empire to Cimage – at the time one of several TPS division IT companies (another was CAFM vendor, MASS Systems) prior to a series of management buy-outs. Having a British joint CEO indicates the importance of the UK market to Sword – approximately half its revenues come from the UK.

At the end of July 2007, Sword employed 1,700 staff across 14 countries, with a 2006 consolidated turnover of €142m (£103m) and a forecasted 2007 consolidated turnover of €180m+ (£131m).

Analysis

In my dissection of the BO/Citadon merger last year, I pointed out how distressed BO’s UK operation had been, having also absorbed millions of pounds-worth of investments to lag behind UK competitors such as BIW Technologies [my employer] and 4Projects. Indeed, in bringing together nearly a dozen previous enterprises, the two merged businesses had burnt their way through a combined total of over £50 million, and before December 2006 was out, CTSpace was already making people redundant. Earlier this year, I was also very dismissive of some ambitious-sounding CTSpace ‘spin’ in a UK trade magazine article (see post).

CTSpace is headquartered in San Francisco, with offices in the UK, France, Germany, Austria and Dubai. In October, CTSpace disposed of its Pune, India-based captive research and development centre and staff, acquired by product development firm Symphony Services. Given the Sword group’s European base, I expect one strategic argument for the acquisition will be to strengthen the group’s representation in the USA.

Building Sword’s SaaS position is another justification for the acquisition. Sword previously acquired Dubai and London-based financial systems specialist Apak, whose portfolio features some SaaS-delivered applications.

With other industry watchers, I have been sceptical about the repeated efforts of BuildOnline/Citadon aka CTspace to prove that it is a global business capable of growing and then generating a sustained level of profits. Perhaps becoming part of a much bigger IT organisation is just what it needs.

Will the CTSpace brand disappear? Probably. CTSpace didn’t rebrand its merged product portfolio and continues to manage two product sets (the current CTSpace website, for example, still gives contact details for BuildOnline and Citadon CW product support – a new website is promised for January 2008, by the way) and many of Sword’s previous acquisiti
ons were quickly renamed and rebranded. So, I wouldn’t be surprised if the CTSpace name disappeared. (Update (28 December 2007): I have just seen a French website report on the acquisition that suggests – if my translation is correct – that the new Sword SaaS business will be called Sword Soft.)

Permanent link to this article: http://extranetevolution.com/2007/12/ctspace-put-to/

7 pings

Skip to comment form

  1. Business steady at Sword CTSpace? | Extranet Evolution

    […] since the combined CTSpace operation was acquired by France-based Sword Group SA in late 2007 (post) is not easy, particularly when companies get merged with other, unrelated operations. From a close […]

  2. BuildOnline UK revises past performance | Extranet Evolution

    […] with Citadon (see post) to become CTSpace. A year later (December 2007), the combined group was acquired by the Sword […]

  3. CTSpace launches FusionLIVE – end of the road for BuildOnline and Citadon | Extranet Evolution

    […] Catching up with recent announcements in the world of construction collaboration technologies, I see that Sword CTSpace has launched a new Software-as-a-Service application, FusionLive, that looks like it will eventually replace both the BuildOnline and Citadon applications inherited when Sword acquired CTSpace in December 2007 (post). […]

  4. More on Sword | Extranet Evolution

    […] ← CTSpace put to the Sword Reviewing 2007 […]

  5. IDOX acquires CTSpace for £11.6m cash | Extranet Evolution

    […] of CTSpace for £11.6m cash.” Sword-CTSpace was a subsidiary of the France-based Sword group (acquisition in December 2007) offering a combination of both on-premise and Software-as-a-Service construction […]

  6. Reflections on the 4Projects acquisition | Extranet Evolution

    […] was subsequently bought by Sword in December 2007, who then sold it to Idox in November 2011, after which the CTSpace name disappeared in March 2012; […]

  7. CTSpace launches FusionLIVE – end of the road for BuildOnline and Citadon | Extranet Evolution

    […] Catching up with recent announcements in the world of construction collaboration technologies, I see that Sword CTSpace has launched a new Software-as-a-Service application, FusionLive, that looks like it will eventually replace both the BuildOnline and Citadon applications inherited when Sword acquired CTSpace in December 2007 (post). […]

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>