Responding to what it sees as a saturated multimedia publishing market, Concord, Massachusetts-based Capitol Multimedia Inc is diversifying from CD-ROM software into supply chain management by buying Dedham, Massachusetts-based Client Server Technologies Inc for $4.2m. The purchase will be for $1.17m in cash, with the rest in Capitol shares and notes payable beginning in fiscal 1999. Capitol’s president Luda Kopeikina, a former vice-president of General Electric Co Inc’s GE Information Services unit, believes there are too many products on the multimedia publishing market and that competition with Disney is tough, and can forsee no improvement in the next couple of years. The company sees it as prudent to choose a market with high growth and potential such as supply chain software, and has skills in software development, that include a division in St Petersburg, Russia which it can bring to bear. And although large, established firms such as Baan Co NV, Peoplesoft Inc and Manugistics Corp operate there, Capitol believes the market is fragmented enough to mean it will not have to compete with them head-to-head. According to Kopeikina, the company does not foresee lay-offs at privately-held Client Server Technologies, whose 40 staff will bring Capitol’s payroll up to 160. Client Server’s president Paul Carr will also be staying on as president of the unit.
