VAR500 This Week: Earnings Up, M&A Activity Hits Stride

This first week in February saw a number of VARs announce earnings, as well as a couple of acquisitions. See who did what -- and how the solution provider landscape is evolving.





Editor's note: We've started collecting information for our 2010 VAR500. The VAR500 is a listing of the largest IT solution providers in North America. VARs, resellers and solution providers with revenue of $20 million or greater are invited to take part in the 2010 VAR500 survey.

Capgemini (2009 VAR500 rank: 7) acquired purchasing solutions provider IBX this week. The move creates a global end-to-end, procurement-as-a-service offering.





The new solution will give clients access to a full suite of products and services, including business process outsourcing, a software-as-a-service procurement platform, and an established global supplier network with more than 20,000 suppliers, to help reduce costs. According to Capgemini, the new Internet-based offering costs approximately one tenth of what it would cost companies to develop such a solution in-house and will also improve the overall cost of goods procured.





"Now that our unique offering provides the end-to-end capabilities from transformation consulting to global sourcing, organizations need only seek a single partner for procurement outsourcing," said Hubert Giraud (pictured), global leader of Capgemini BPO, in a statement. "Not only does the fully integrated approach achieve significant savings faster, the required investment to recognize and achieve the saving is also less."

CACI International (2009 VAR500 rank: 56) has completed its acquisition of cybersecurity company SystemWare for an undisclosed sum.



SystemWare's customer base includes the Department of Defense, federal agencies and members of the intelligence community. The company makes systems that help users monitor and detect cybersecurity and physical security issues. More than half of the company's employees hold Secret-level security clearances and above.



CACI President and CEO Paul Cofoni (pictured) said in a statement that the acquisition "is particularly important to our ongoing focus on meeting the strong demand for solutions in counterintelligence and cybersecurity."

Wayside Technology Group (2008 VAR500 rank: 191) reported this week that its revenue was up six percent year-over-year to $42.3 million for its fourth quarter of 2009.



Sales for the fourth quarter of 2009 for the Lifeboat Distribution segment were up 27 percent, to $28.9 million from $22.7 million in the fourth quarter of 2008. The increased was attributed to strong growth for some product lines as well as signing on more software publishers. Gross profit dollars for our Lifeboat segment increased by 25 percent in the fourth quarter of 2009. However, sales for the fourth quarter of 2009 for the Programmer's Paradise segment were down 23 percent, coming in at $13.4 million.



"I'm very pleased with our solid YTD 2009 results as well as our fourth quarter results," said Simon F. Nynens (pictured), chairman and chief executive officer, during a call announcing the results. "We have performed well in a very difficult economic climate and strengthened our position in the software distribution market in 2009 and continued to sign on new vendors. Strict cost controls allowed us to drive a solid earnings performance."

Fidelity National Information Services (2009 VAR500 rank 41) reported a fourth-quarter loss on Thursday, taking charges for an acquisition and other one-time expenses. The company, which now goes by the company name FIS, said it lost $53.9 million compared with a profit of $28.8 million a year ago.



The results included costs related to the October acquisition of Metavante Technologies. Excluding the charges, the company reported earnings of $167.3 million, and revenue of $1.3 billion, up from $858 million a year ago.



"The new FIS is stronger, more competitive and better equipped to meet the needs of a changing industry and to take advantage of the resurgence in bank technology spending as market conditions improve throughout the world," said FIS Executive Chairman William Foley during the conference call announcing the results.