A tweet from a former colleague alerted me to it, and it was confirmed when I looked at my TweetDeck search column: “IDOX … announces the acquisition 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 collaboration technologies, but the parent group is apparently keen to focus on CRM/ECM and wholesale finance markets, and has managed to find a buyer for the business.
IDOX group says it is “a leading developer and supplier of software solutions and information services to UK local government”. It is listed on the London Stock Exchange and its LSE announcement said the deal would complement its December 2010 acquisition of engineering document management and control supplier McLaren Software (today’s McLaren news release). It continued:
CTSpace, which is headquartered in London, had revenues of £12.7m (approximately half of these were generated in Europe and half in North America), which generated EBITDA of £1.7m and pre-tax profit of £1.3m for the year ended 31 December 2010 when CTSpace had net assets of £4.1m. The business had cash at completion of £0.5m. IDOX will fund the acquisition entirely from a new term and revolving credit facility through its existing relationship with Lloyds Banking Group.
CTSpace provides both Software as a Service (‘SaaS’) and on-premise enterprise solutions, the latter of which leverage an organization’s existing investment in leading enterprise content management (‘ECM’) platforms such as IBM FileNet®, EMC Documentum® or Microsoft SharePoint®. When deployed with leading enterprise content management platforms, CTSpace’s products provide an integrated, best practice environment that supports a project’s entire lifecycle.
With the existing resources of McLaren Software and the Group’s integrated software development resource, the addition of CTSpace brings further scale, efficiencies and enhanced product and development capabilities.
Mergers, acquisitions and changes of name have figured frequently in the history of CTSpace and its predecessors, which include BuildOnline and Citadon among (many) others – see Investing in a dot.com/SaaS business: a history. I will be doing a more in-depth look at this acquisition shortly.
CT Space algebra:
A decade and a half of effort + over £100m of cash – poor management = £11.6m
It is a sad and sobering story, Steve. A decade ago, if you believed Mark Suster’s hard-sell, BuildOnline were going to take the industry by storm. Today that brand, along with several others it swallowed or got merged with, has long disappeared (along with a lot of dosh!), and now its latest manifestation is set to go.
The nature of the business has also changed over recent times. BuildOnline set out as a pure SaaS-based business, and remained that way until its acquisition by Sword. Initially, I thought they had big aspirations to develop a strong SaaS division, but that vision soon got diluted as various on-premise offerings got bundled in with it (a process perhaps accelerated due to the impact of the global financial crisis on the construction market). Today, it is unclear how much revenue comes from its SaaS product (FusionLive) and how much comes from Fusion Enterprise (its update of the old CImage product), but the acquisition by McLaren is likely to maintain that hybrid mix.
Sad & Sobering indeed, Paul.
Your summary of it is pretty spot on, I think, especially the dilution of the SaaS model.