We didn’t think we’d have to wait long to see M&A activity from Calyx, which you may remember is backed by Jon Moulton’s investment fund Better Capital and led by CEO Fiona Timothy (whose achievements include transforming COA Solutions - see Calyx has three new faces). Today we can report on not one, but two strategic, bolt-on acquisitions by Calyx's Software division. Calyx Software is acquiring a division of Touchstone Group, which supplies integrated business software to mid-sized UK organisations, and Trinity Computer Services, which specializes in wholesale and distribution applications based on Microsoft Dynamics Great Plains. Touchstone is an 'old soldier' that we've been writing about for many years. It de-listed from AIM in 2009 (see the Hotviews archive for the whole story).
Calyx looks to have got a good deal. Better Capital is advancing £6m to Calyx for the two businesses suggesting the purchase price is roughly 1x revenues – Trinity turned over £2.9m in the year to September 2010, while the Touchstone division brought in £3.2m in FY11. The businesses, which Timothy says are both profitable and cash generative, add critical mass and vertical capability to Calyx's Great Plains reseller business and fit with its strategy of supporting mid-sized organisations. Indeed, according to Better Capital, the transactions will make Calyx the UK’s largest Microsoft Dynamics GP reseller with more than 500 customers.
No doubt we'll be reporting on more bolt-on acquisitions from Calyx in due course. But the larger managed services side of the business (accounting for some 75-80% of Calyx's total revenues) could well be the next to benefit.