Sage Partners Merge To Gain National Reach
Two Sage Software solution providers on Thursday announced they were merging to form a combined company with $16.5 million in trailing 12-month sales, 85 employees and 25 offices nationwide.
The merger of Blytheco, Laguna Hills, Calif., and Macdonald Consulting Group, Atlanta, will take on the name Blytheco LLC, with headquarters in both locations. Stephen Blythe was named CEO, and Ruth Menter, former president of Macdonald, was named president and COO.
"We're in active discussions with several other large regional players, and we're looking to provide national coverage under a single brand," Blythe said.
He said Blytheco and Macdonald have together acquired six smaller Sage resellers over the last two years, and they plan to bring more into the fold after establishing other large regional centers through mergers.
Blytheco accounted for $10.1 million of the sales and 55 of the employees, while Macdonald had $6.4 million in sales and 20 to 30 employees. The combined entity will be among Sage's top three partners, Blythe said. The other two are focused on Sage's Timberline product for the construction industry, rather than its MAS 90, MAS 200 and MAS 500 product lines, he said.
Blytheco and Macdonald have similar business models, providing applications consulting and infrastructure support for midmarket clients, and they got to know each other by working together on national accounts that required local support in each of their regions, Blythe said. While Macdonald has a strong presence in the Southeast, Blytheco's base is in southern California, with satellite offices in the Northeast and Midwest.
Blythe said one of the reasons the companies decided to merge was to be able to service larger national acounts. "We were partnering together anyway, so it seemed a logical step," he said.
The market also faces a shortage of available talent, according to Blythe. Vendors such as Sage and Microsoft have expanded their product lines, which has put pressure on ERP VARs to get larger and expand their capabilities or join larger companies, he said.
"If you're doing this for two or three sales a year, it doesn't make sense anymore," he said.
He said traditional VARs that just focus on MAS 90 have not been able to grow or have gone out of business, while those that have expanded and taken advantage of cross-selling opportunities have grown. "For the larger resellers and VARs that have invested in their staff, the market is growing -- 30 percent for us in just organic growth -- but for a lot of the smaller VARs, the market is shrinking," he said.
Blytheco also plans to focus its development resources on creating interfaces between third-party products and Sage's product line, which it will make available to other Sage partners as well as to its clients.