Q&A With Emerald Solutions’ Martin Wright: How SBI Was Chosen As a Buyer

Martin Wright, president and CEO of Emerald Solutions, spoke to VARBusiness industry editor Rich Cirillo about what the company was looking for in a potential suitor and how it found SBI.

VARBusiness: How long has Emerald Solutions been in the market for a buyer?
Wright: About a year ago we realized an IPO as an independent company was unlikely. We had our S-1 filed at that point in time and basically made a decision to work with our banking team to look at other alternatives. We looked at a lot of other companies. We probably spoke to most of the public e-services companies and the large integrators out there; you name it we talked to them. We were looking for someone with great financial discipline and great stability, and we wanted to make sure they had a focus on clients, delivery and exceeding expectations. We needed to understand that they had values and a culture consistent with our own and that they valued their employees the same way we do.

VB: How did you become aware of SBI, and what made them attractive to you?
Wright: When we looked at many of the other companies we found ourselves getting into a situation worse than the one we were in. We were striving to become profitable and make ourselves fit into a smaller footprint, and here we were looking at other companies with revenue in rapid decline without strong client relationships. So SBI was unique from the perspective that they really have a stable financial environment and a strong discipline around profitability. They have been growing while other people have been shrinking. And they've got a great reputation with clients and a great relationship with employees.

VB: Once the decision was made, what did Emerald have to do internally to get itself ready to be acquired?
Wright: We did was almost nothing. We weren't sure how long the process was going to take; early indications were three to four months, but it ended up taking close to a year before we made our final decision. During that time you have to keep everybody focused on client delivery, getting out and making new sales and keeping employees happy. So you have to have a business-as-usual kind of philosophy. When you get the right partner, then things can happen pretty quickly. That's kind of what happened with SBI.

VB: Have you had to do layoffs during the past year to match market conditions?
Wright: Yes. We've tried to keep our people fairly highly utilized, so we are just above 200 people right now. We had to shrink into that footprint.

VB: Will there be additional layoffs in light of the acquisition?
Wright: There will be some overlap in some of the corporate functions, so we've already informed our corporate staff that once we complete the integration process, we will be switching over to SBI's corporate functions and headquarters in Salt Lake City. So we will have some corporate staff layoffs, but our delivery teams, business development and management will remain intact.

VB: Describe Emerald's core competencies and the strengths you believe it can bring to SBI.
Wright: It's been anything related to taking back-end operational systems and integrating them into Web applications. So it might be either billing systems or customer support systems or new e-commerce systems with heavy lifting on the back end, and making sure we bring that data and competency and capability closer to the user using Internet or Web technology. A lot of that has involved CRM systems like Siebel, but many of our clients are also looking for competencies in e-commerce packages and Web application packages like ATG and Blue Martini. We've had great traction in specific verticals, and we are adding capabilities for SBI in telecommunications, with clients include companies like AT&T, AT&T Wireless, Verizon, Cable & Wireless, etc. The other major vertical we are adding for SBI is transportation and logistics, with clients like American Airlines and Hawaiian Air. We've both got good traction in media and entertainment, so combined our media and entertainment competency is tremendous now. We bring with us relationships with Consumer Reports, Readers' Digest, Disney and Hasbro. More and more clients are looking for companies that understand their business and can leverage technology specifically to help them with their problems.

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