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Calyx has said that yesterday's acquisitions of parts of Touchstone and Trinity will form the base for a wider buy-and-build strategy of Microsoft Dynamics Great Plains (GP) specialists for its software unit, Calyx Software Ltd.

The firm, which was bought out of administration last year, has previously said it would look to buy companies to bulk up its Calyx Managed Services business, but surprised the markets yesterday when it made its first move in the shape of two small bolt-on buys for Calyx Software instead.

Speaking to MicroScope today, Calyx M&A director Mark Lane said the group wanted to kick off with acquisitions on the software side as it was "smaller and more manageable".

"The software business has been in the shadows, so by breaking it out we've put it in a position where it can develop as a separate business in its own right," he said.

Lane said that the Dynamics GP business was long overdue for consolidation, and had been largely left behind due to an inefficient channel structure.

"Rather than a collector of companies we wanted to build the business strategically and create a consolidation platform, and the GP market is ideally placed to benefit from that," he said.

The acquisitions of the GP business of reseller Touchstone and ISV Trinity adds a little over 300 Microsoft customers to Calyx Software's end-user base, and also provides Calyx with its own IP and software development capabilities.

The enlarged business is expected to have run rate revenues of £15m per annum, which Lane said was an "ideal platform for the next stage of acquisitions", which is expected before the year is out.

TechMarketView's Tola Sargeant said: "Calyx looks to have got a good deal. Better Capital is advancing £6m to [it] for the two businesses but we understand both businesses have cash and other assets, suggesting the purchase price is significantly less than one times revenues."

"No doubt we'll be reporting on more bolt-on acquisitions from Calyx in due course, but the larger managed services side of the business could well be the next to benefit," she added.

Lane confirmed Calyx Managed Services was still laying the groundwork for its own M&A drive but said it will not be buying anything in the immediate future.



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