Edgewater Technology, a technology management consulting firm specialising in providing specialty IT services, has acquired Alabama-based Fullscope, a Microsoft Dynamics consulting firm that provides discrete and process manufacturing ERP consulting services in the upper mid-market..
Under the terms of the merger agreement, Fullscope’s operating results will be combined with those of Edgewater’s beginning on January 1, 2010 and the transaction is expected to be accretive to earnings per share in 2010.
Fullscope shareholders will receive total upfront cash consideration of $12.5m. The transaction also includes an earnout agreement under which positive net income, if any, generated by Fullscope from the process development business unit payments will be passed through and paid to the former Fullscope stockholders. The process development business unit payments are expected to be in the range of $2.0m to $2.5m.
Earlier in June, Fullscope has sold to Microsoft two software product add-on modules to Microsoft Dynamics AX 2009 (the process development business unit). The transaction includes provisions for payments to be made by Microsoft to Fullscope through June 25, 2011 and for several support-related statements of work to be performed by Fullscope and funded by Microsoft through various dates ending in August 2011.
Excluding the process development business unit, Fullscope generated approximately $12.6m in annualised service revenue and $9.1m of software resale revenue in the most recent twelve-month period.
Shirley Singleton, chairman, president and CEO of Edgewater, said: “Russell Smith, John Scandar and the entire Fullscope team are a great addition to the Edgewater family. Fullscope extends the reach of our strategic data and analytics offerings into the upper middle market.
“We see tremendous opportunity in this market segment from a combination of updating and upgrading existing ERP platforms, many of which have been untouched since the 1999-2000 timeframe, and implementing the same Enterprise Performance Management (EPM) capabilities we have been providing to the Global 2000.”
