Identity management specialist, GB Group, is expanding its operations with the acquisition of Data Discoveries for a total consideration of £0.61 million. According to GB Group, Data Discoveries is “a provider of trace software to Government and the debt collection industry which enables organisations to trace and make contact with individuals through a better understanding of their identity and behaviour”. Essentially, this means that it is undertaking very similar activities to GB Group’s largest business, DataSolutions, which has an existing ID Trace Solution.
DataSolutions makes up the lion’s share of GB Group’s annual revenues - £14.4 million out of £24.4 million in total revenues in its last financial year (see GB Group identifies revenue and profits growth). The business grew significantly last year with revenue up 15% and profits up 11%. Data Discovery will add a further £1.7 million in revenues (and was break even at the pre-tax level in the year to 30th June 2011). The acquisition is clearly designed to accelerate this growth by adding new customers and new sectors.
What isn’t clear is how GB Group's ID tracing software portfolio will be developed in the future. GB Group’s own ID Trace software has proven very successful in the market. It doesn’t appear that GB Group’s motivation for acquiring has been to add new software functionality. Indeed, as far as we can tell Data Discoveries’ software solution does much the same thing. So will GB Group look to migrate Data Discoveries’ customers onto its own software over time? Surely it doesn’t make sense to continue investing in ongoing development of two similar applications? We look forward to hearing more.