Digica is at Last coming home

Digica founder Richard Last to head buyout team

Digica founder Richard Last to head buyout team

Leading AS/400 outsourcer Digica has announced a management buyout deal from its troubled parent DCS. The Nottingham and Leeds based outfit is being backed to the tune of £23.3m by Bridgepoint Capital, a private European equity house. The buyout is headed by Richard Last, who founded Digica in 1998 and will become chief executive officer of the new corporation.

DCS, which has seen its share price slump in the last year from a high of £21 to a recent low under 40 pence, will use money from the sale to reduce its overall debt burden. The deal will also enable it to concentrate on its vertical market specialities in the automotive and logistic arenas.

Digica believes the transaction will leave it with sufficient working capital to fund its business plan objectives, which Last says will include expansion into the US and Europe. "In Europe we'll be looking particularly at the German, French and Benelux markets as it's a little known fact that France, Germany and even Italy have more mid-range IBM machines than the UK.

"Our strategy is one of acquisition and organic growth and the buyout gives us the freedom to have our own strategy where we aren't subject to a competing strategy, even if it had been friendly. One of the exciting prospects is that the market we address, with a primary focus on the desktop and mid range, is under-populated in supplier terms."

Last says no staff layoffs are planned and he believes the expansion plans should result in more workers being taken on.

The investors will hold three-quarters of the new company's shares, with Bridgepoint Capital taking a place on the board. But Last says the running of the company will still be down to the Digica management and reassures customers that the deal is good news. "We are excited about it, the staff are excited and the reaction from the clients has been superb."

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