Vista Equity Partners Buys SirsiDynix
Tech-focused private equity firm the latest to enter library market
By Michael Rogers -- Library Journal, 2/1/2007
The landscape of library technology companies in recent times has been shifting almost as quickly as the products they develop. In a year marked by several major acquisitions, the waning hours of 2006 brought word of yet another top vendor being purchased by a tech-focused private investment firm: Vista Equity Partners announced December 27 that it will acquire SirsiDynix for an undisclosed sum. The deal should be completed early this year. Vista Equity's entry into the library software arena is yet another change in the library vendor geography. Once populated by independent companies with intimate knowledge of their customers, the terrain is now dotted with megabuck investment firms that own many of the monster vendors.
Commenting on the buyout, Vanderbilt University's Marshall Breeding, who writes LJ's annual automation marketplace feature, noted, “A private equity firm such as Vista, with over $1 billion at its disposal, has the resources that at least potentially give the company better means to satisfy the customers.” While the company's Horizon and Unicorn systems are due to merge in the long term, asserted Breeding—“[it] isn't going to develop two parallel products forever”—both have such large customer bases that abrupt change would cost the firm customers. “But the ILS isn't the most important piece of the pie,” Breeding said, pointing to the company's challenge in helping libraries manage e-content, “and SirsiDynix is weak on that front now.” So, while he didn't predict that Vista, like Francisco Partners, will go out and purchase another ILS vendor, “there may be other synergies, such as buying a related company.”
It's buying time again
Buyouts always cause a shake-up among customers, who often jump ship only to be scooped up by a competitor. Dynix has changed hands three times in the last decade, including a buyout in the 1990s by Baby Bell company Ameritech, which resold it several years later to a private investment operation led by the 21st Century Group, at which point the vendor became known as epixtech. It reverted back to Dynix in 2003 before being bought by Sirsi in 2005. Vista's other properties are mostly business and insurance industry software providers, including Applied systems (insurance), Brainware (business), CRC Information Systems (business management), and Reynolds & Reynolds (automotive retailing).
SirsiDynix will “continue its focus on product innovation and excellence in customer service” and asserts it will be business as usual for its many customers, who won't experience any ripples from the buyout. The challenge for the new company will be growing marketplace discontent with the OPAC.
