A day after reporting record revenues and income, Softchoice Corp. treated itself to an acquisition.
The Toronto VAR said Tuesday it will buy the software sales division of 3-Soft Group Inc. of Brossard, Que., claiming it extends its lead as the biggest software reseller in the nation.
today is the number one reseller of Microsoft in Canada, and 3-Soft is in the top five,”” said Softchoice president David MacDonald, “”so this will put us far and away the largest reseller of software in general in the marketplace.””
The deal is scheduled to close Feb. 25.This week publicly-traded Softchoice said it earned $12.8 million in net revenue on sales of $630 million through 30 offices across North America.
MacDonald wouldn’t disclose the sale price of 3-Soft, which is privately held. However he said the acquisition would add about $50 million a year to Softchoice’s revenues.
“”They’re very strong in the Quebec marketplace with Microsoft, and with software in general,”” said MacDonald, “”and they’re very strong in the education marketplace in every province except B.C, where we’re very strong.””
“”It doesn’t look like there’s any overlaps that are problematic. All the overlaps are positive.””
Softchoice has branched out aggressively into hardware sales in the past three years and will carry that into 3-Soft accounts it brings in, MacDonald added.
3-Soft, with offices in Calgary, Toronto and Ottawa in addition to Montreal, says it is the largest privately held software reseller in the country, with revenues of about $60 million. Named the top large account reseller (LAR) of the Year for Microsoft academic licensing sales in 2004, in addition to large sales in Quebec it has been a strong player in the Canadian federal government space.
3-Soft co-founder and president Serge Beauchemin said the company is selling the software division so it can focus on its Noxent managed services and IT training divisions.
”This is a tremendous and extraordinary transaction for our staff and my customers because they’ll get a lot more coverage, a lot more tools to serve customers, a larger scale organization for career opportunities,” he said.
”3-Soft was more a target of consolidation than a consolidator by itself,” he explained. A sale “was inevitable.” Last fall he approached three potential buyers “so during that process we could control the outcome for our employees.”
MacDonald hopes to take “”substantially most”” of 3-Soft Software Licencing’s staff of 40.
“”Our key is to retain their customers,”” he said, “”and to that end all customer-facing sales and service people are at the top of our list to keep because loyalties are usually driven by those relationships.””
However, the 3-Soft name will eventually disappear.