US group swoops for Sarian Systems
A YORKSHIRE electronics company that was founded on a kitchen table has been bought by a US technology group for $30.5m.
Ilkley-based wireless communications specialist Sarian Systems has been acquired in a cash deal by US NASDAQ quoted technology firm Digi International.
Sarian provides wired and wireless communications products for ATMs, lottery terminals and card payment systems and has customers including American Express, BP and T-Mobile.
The deal will see Sarian operate as a subsidiary of Digi International, retaining its management team including the three founders, Andy Hood, Robin Hudson and Nick Monaghan and keeping its headquarters in Ilkley.
Sarian had sales of £5.25m across 40 countries in the year to June 30, 2007.
The business was founded on Mr Hudson’s kitchen table in 1999 in Steeton near Keighley and backed with early-stage funding provided by YFM Private Equity (YFM).
Sarian produces IP router devices vital to the day-to-day running of a business. Such applications typically include ATMs and lottery terminals, where any downtime will bring business to a halt, as well as resulting in lost revenue and customer dissatisfaction.
Sarian products are used in more than 75% of UK petrol stations and it is the preferred supplier to companies operating 80% of the worldwide lottery market.
Managing director Mr Hood said that Digi International’s global presence will enable Sarian to reach new markets in North America, South America and Asia-Pacific.
“We have been approached two or three times over the last year. This deal happened quickly, probably in about two-and-a-half months, it is exciting to be part of them. There are many opportunities that being part of Digi will provide,” Mr Hood told TheBusinessDesk.com.
“With the great cultural and technical fit we see Digi as the ideal partner to take the fast growing business that we have in Europe, Scandinavia and Southern Africa into many other geographic regions.
“Digi’s market-leading drop-in networking technology and our flexible wired and wireless IP routing capability create a powerful global combination,” he said.
For Digi the acquisition will allow it to expand its operations into the global enterprise market, taking advantage of Sarian’s industry-leading IP routers, designed specifically for communications critical to day-to-day business operations.
“Financially, we’re acquiring a high-growth, profitable wireless business that can be expanded from Europe into other parts of the world,” said Joe Dunsmore, chairman, president and CEO of Digi.
He added: “We have very similar corporate cultures and vertical go-to-market strategies, so integration will be straightforward and with Sarian’s strong European engineering and sales presence, we’re immediately increasing the international content and capabilities of our business.”
David Gee, investment director at YFM who sat on the Sarian board as a non-executive director since their investment in 2000 stated: “It was our privilege to be involved in their journey from start up to a successful international business. This demonstrates what can be achieved with the right combination of technical and commercial skills together with good old Yorkshire grit and determination”.
Dave Irwin, of BTG McInnes Corporate Finance, who advised on the deal together with Sonia Alghita, said: “This is a great Yorkshire success story. Sarian is a business that has achieved continuous success since it was formed, which has been delivered through management’s dedication to developing market-leading technology. Having already been recognised in the Tech-Track 100 and last year’s Deloitte EMEA Fast 500 listings, the business is well positioned to achieve considerable future growth.
“The outcome is great news for Sarian and represents a very logical strategic move for Digi, delivering material benefits for both parties in terms of shared technology and immediate access to new markets.”
Other advisors in the deal included John Hamer and Mark Whittaker of Walker Morris and Clare Mackintosh of Keeble Hawson.
The Yorkshire firm featured in the 2006 Sunday Times Microsoft Tech Track 100 as one of the UK’s fastest growing technology companies. Sarian was also named ‘Yorkshire Post Small Business of the Year’ in 2006, and was one of Deloitte’s Europe Middle East and Asia Fast 500 Companies in 2007.
