Deltek plans to buy Danish firm

By Marjorie Censer
Monday, June 7, 2010

Herndon-based Deltek announced last week that it plans to buy Danish firm Maconomy, moving the company -- which has grown dramatically in the last decade -- more firmly into the global marketplace.

Since New York-based private-equity firm New Mountain Capital bought 75 percent of its shares in 2005, Deltek, founded in 1983, has acquired nearly a half dozen companies.

Kevin Parker, Deltek's president and chief executive since 2005, said buying Maconomy will more than double the firm's European revenue and provide a "marquee list" of European customers.

"We've not been as strong in Europe; Maconomy's very strong in the European market," he said. "It's really a common focus with complementary strengths."

Together, the two companies will seek to expand into Asia, Parker said.

Deltek is known for providing software to what it dubs project-focused businesses, particularly government contractors trying to navigate extensive federal record-keeping requirements, while Maconomy also provides services to advertising, public relations, accounting and consulting firms.

Last year, Deltek bought Reston-based mySBX, an online network that allows government contractors and professionals to find partners and publish opportunities. The previous year, the company bought Planview's MPM division, which makes an earned-value-management software application.

The Maconomy board has unanimously approved Deltek's offer of approximately $3.39 per share in cash and recommended to the company's shareholders they tender their shares.

The offer is expected to close in early July, and Parker said Deltek would then begin integrating the two businesses.

Deltek said it is paying a premium of about 50 percent over the June 1 closing price for Maconomy's shares, which then gained 48 percent over the next two days on the Nasdaq OMX Copenhagen Exchange.

Maconomy posted revenue of about $41 million in 2009 and about $10.5 million in the first quarter of 2010, while Deltek's revenue reached $265.8 million in 2009.

In 2005, Deltek's revenue was about $100 million.

Parker said the company is considering future acquisitions.

"There are a lot of things out there that are very attractive to us," he said. "We're always looking for those things that work well within our mission."

Philip L. Bronner, a general partner at Novak Biddle Venture Partners focused on software and Internet investments, said he expects to see additional consolidation within the software industry.

"Before, you saw a lot of [mergers and acquisitions] from the very large software companies," he said. "Now what you're starting to see is a lot of M&A from the mid-tier players who are looking to bulk up."

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