A day after reporting record revenues and income, Softchoice Corp. treated itself to an acquisition.
The Toronto VAR said it will buy the software sales division of 3-Soft Group Inc. of Brossard, Que., claiming it extends its lead as the biggest software reseller in the nation.
“”Softchoice
today is the number 1 reseller of Microsoft in Canada, and 3-Soft is in the top five,”” said Softchoice president David MacDonald, “”so this will make us far and away the largest reseller of software in general in the marketplace.””
The deal was scheduled to close Feb. 25.
Last month publicly traded Soft-choice said it earned $12.8 million in net revenue on sales of $630 million through 30 offices across North America.
MacDonald wouldn’t disclose the sale price of 3-Soft, which is privately held. However he said the acquisition would add about $50 million a year to his company’s revenues.
“”They’re very strong in the Quebec marketplace with Microsoft, and with software in general.”” said MacDonald, “”And they’re very strong in the education marketplace in every province except B.C, where we’re very strong.””
Branched out
“”It doesn’t look like there are any overlaps that are problematic. All the overlaps are positive.””
Softchoice has branched out aggressively into hardware sales in the past three years and will carry that into the 3-Soft accounts it brings in, MacDonald added. 3-Soft, which has offices in Calgary, Toronto and Ottawa in addition to Montreal, says it is the largest privately held software reseller in the country, with revenues of about $60 million.
Named the top large account reseller (LAR) of the year for Microsoft academic licensing sales in 2004, in addition to large sales in Quebec 3-Soft has been a strong player in sales to the federal government.
3-Soft co-founder and president Serge Beauchemin said the company is selling the software division so it can focus on its Noxent managed services and IT training divisions.
Consolidation target
“”This is a tremendous and extraordinary transaction for our staff and my customers because they’ll get a lot more coverage, a lot more tools to serve customers and a larger scale organization for career opportunities,”” he said.
“”3-Soft was more a target of consolidation than a consolidator by itself,”” he explained. A sale “”was inevitable.””
Last fall he approached three potential buyers “”so during that process we could control the outcome for our employees.””
MacDonald hopes to take most of 3-Soft Software Licencing’s staff of 40.
“”Our key is to retain their customers,”” he said, “”and to that end all customer-facing sales and service people are at the top of our list to keep because loyalties are usually driven by those relationships.””
One result of the sale is that the 3-Softname will eventually disappear. In addition Beauchemin has to come up with a name for the training division.
