DCS Group Plc, the UK-based software and services company, is paying 12.1m pounds ($19.3m) to buy Cardis Car Dealer Information Systems AG from Siemens Business Systems. The deal will give DCS a huge European customer base of 7,000 dealers in BMW, Mercedes and Volkswagen vehicles.
While Siemens has been disposing of non-core assets, its decision to part with Cardis was accelerated by problems that led to a write-off of 3.9m pounds ($6.2m) last year on an aborted R&D effort. Cardis had revenue of 31.4m pounds ($50.2m) last year and produced pre-tax profit of 400,000 pounds ($640,000) in the first quarter of the current year on revenue of 7.2m pounds ($11.5m).
DCS chief executive, Tim Robinson says the acquisition opens the opportunity to unleash its services, outsourcing and e-business capabilities on an extensive European client base. As a traditional supplier of software to the motor trade, DCS plans to use its own products in Cardis’ next generation of products.
DCS has been rapidly expanding revenue by offering IT services and outsourcing to its base of software customers and the Cardis acquisition offers an opportunity to accelerate the process.
Under a complex deal, DCS will pay 2.4m pounds ($3.8m) for 51% of the Cardis shares with an option to pay 2.2m pounds ($3.5m) for the remaining 49% over the next two years. In addition, DCS will repay Siemens 7.5m pounds ($12m) for Cardis’ borrowing facilities.
