SirsiDynix Acquired by Private Equity Firm; Service To Remain Same, but Will Costs Rise?

-- Library Journal, 12/27/2006

SirsiDynix, the leading automation vendor used by public, academic, and school libraries, announced today that it will be acquired by Vista Equity Partners, a $1 billion private equity firm that focuses on investing in software and technology businesses. This marks the first time that the San Francisco–based Vista has invested in the library market, according to Lebron Miles, spokesman for SirsiDynix. Terms of the agreement were not released. This marks another milestone in evolving ownership changes in the library automation market. Sirsi and Dynix, once competitors, merged in June 2005, and the company's largest clients now include the Queens Borough Public Library, NY; County of Los Angeles Public Library; Boston Public Library; and Detroit Public Library. There are no current plans to change the SirsiDynix name, Miles said, adding, "We do not expect our customers to see any difference in our services." The deal is expected to become final in mid-January following a regulatory review.

Why did Vista decide to enter the library market? "It shows the vitality of the library market that a private equity firm like Vista would want to be involved with us," Miles said. SirsiDynix CEO Patrick Sommers said, "We’ve become a stronger company over the past five years through a continual focus on delivering products and services that meet the strategic needs of libraries. Vista has an extremely successful track record of building leading software businesses, and we look forward to working with them." Vista founder and managing principal Robert Smith stated, "We are long-term investors in technology companies that are committed to market leadership. We are tremendously excited about working with SirsiDynix because it is clearly the market leader, with a suite of mission-critical software solutions."

But what might that mean? On his Coffee/Code blog, Dan Scott, who's also the systems librarian for Laurentian University, Sudbury, ON, mused that "Vista sees SirsiDynix as holding the most market share in a relatively small market with institutions that are seen as having deep pockets (gee, look at all the books those libraries buy and electronic resources to which they subscribe—they can afford a 10% hike in support fees per year!) and a reluctance to face the pain of migrating to a different software platform. In short, SirsiDynix's customers are ripe for the picking. And, quite possibly, Vista sees opportunity to acquire a few more customers from shakier library products like Voyager. At least, those customers who have not already decided to join forces with an open-source solution like Evergreen." Scott predicted increased fees for service and annual support, the phasing out of the Unicorn system, and a potential merger or acquisition in 2008.