Sirsi Acquires Dynix: ILS Arena Shrinks Again in Megamerger--Conference Report

Buyout tops vendor gossip at ALA conference in Chicago

By Michael Rogers -- Library Journal, 8/15/2005

The steadily smoking volcano of the ILS vendor arena erupted again in mid-June when Goliaths Sirsi and Dynix announced they were joining forces. Though couched as a merger of equals, "this is a merger in terms of putting the organizations together, not a merger in the financial sense," Patrick Sommers, Sirsi's CEO, told LJ. "Sirsi's investors, Seaport Capital, and its three founders will own roughly 90 percent of SirsiDynix and [Dynix investors] Hicks, Muse will own between eight and ten percent. The board will remain the Sirsi board, with the addition of [Dynix CEO] Jack Blount and one representative from Hicks, Muse."

Combined, SirsiDynix will be the largest ILS vendor by far, with approximately 4000 installations worldwide and over 20,000 library outlets. The vendors intend to continue full development and support of both Sirsi's Unicorn and Dynix's Horizon 8.x/Corinthian system. Thomas Gates, Sirsi's vice president of marketing, told LJ that the two "will become one company" to streamline development but will keep their individual identities. "These are strong brands, and they will be retained," said Gates. Both Sirsi's Huntsville, AL, and Dynix's Provo, UT, facilities will be maintained.

Vendors cannot survive on ILS alone. According to Blount, SirsiDynix is "developing RFID, self-check, print management, and more. We're constantly being challenged by new technologies our customers want help with." RFID will roll out "within the year," he said, adding, "you're likely to see portal activity in the first quarter of [2006]. We have a lot of resources to invest in new products."

The merger also triggered a movement of products onto a single platform, "creating one face for the public," Sommers said. In terms of R&D, the merger will allow both sides to "eliminate some duplication of effort. For example, instead of creating two relationships with third-party vendors, we'll be able to create one."

The company's customer base includes both academic and public libraries, and Sommers is concentrating on both. A big push, he said, will be to create products that "improve the library/user relationship." To most, that means increasing the amount of virtual offerings. For academics, that means pondering the library's future role and how it relates to course management. Sommers concurs that libraries face a challenge from Google but contends, "Google can't do it all" and asserts that libraries need "to put a stake in the ground" and claim their territory.

Though the merger was the talk of the show floor at the American Library Association (ALA) conference in Chicago, June 24–27, reaction from librarians and fellow vendors varied. Most were surprised that it was Sirsi, the smaller of the two, buying the larger, but Dynix has a tumultuous history, having been acquired twice already in the past decade. What the real fallout from the purchase will be in terms of customer gains and losses, any consolidations of staff, and continued product support won't be evident for several months.