Endava, which was formed earlier this year through the merger between London-based consulting firm Concise and software services firm Brains Direct, said that it was looking at further deals that would enhance its client-facing operations as well as its near-shore delivery centers in Eastern Europe.
Chief executive Nigel Bridges told Computer Business Review: We are looking at growing both onshore and offshore. We don’t just want to add bulk for the sake of it as there is a danger that it will dilute our quality. The company said earlier this week that it had paid an undisclosed to buy AGS, a 60-strong software development company with operations in Romania.
Bridges said that Endava had been looking at four potential target companies in Eastern Europe prior to signing a deal with AGS, but added that there are only a handful of companies in the region with significant scale – particularly in the former Soviet block.
He said: After communism receded, several entrepreneurs – often professors of IT at universities – started up small five-man outfits, which added scale on the back of a couple of contract wins with clients in the US or UK. However, most have hit a ceiling when they reach headcounts of around 30 employees.
The choice of Moldova as a low-cost IT skills base is an odd one, and is a legacy from the Brains Direct operation. Bridges said that Endava has around 190 of its 410 employees in Moldova, where the company is the largest privately-owned business. He said: It is a lot easier to get to than some other offshore locations, and the quality of staff is excellent.
Bridges said that Endava is profitable, with annual sales exceeding 10m pounds ($18m) in 2005. It is currently 75% owned by employees.
