Carlyle Group Acquires Digiop - Deal Examined

JH
John Honovich
•Published Mar 08, 2011 00:00 AM
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In March 2011, the Carlyle Group [link no longer available], a global asset manager with nearly $100 Billion under management, acquired VMS developer Digiop [link no longer available]. In this note, based on an interview with Digiop, we examine the background of Digiop, its potential fit with the Carlyle Group and Digiop's future.

Background

While the company originally started in the early 2000s as a digital recorder manufacturer named General Solutions, in the last 3 years the company has re-established itself as VMS software provider focusing on the lower, non-enterprise end of the market focusing on retail and apparel stores. For the past few years and continuing going forward, Dell is the primary hardware provider for Digiop's VMS software providing warranty and hardware replacement. Digiop reported 30 employees total prior to the acquistion.

Fit with the Carlyle Group

Digiop reports that the Carlyle Group plans to manage Digiop as an ongoing business and is investing resources to grow the organization including its sales and support staff, increasing the company's direct employees to 40.

Additionally, the Carlyle Group will seek to maximize synergies with other portfolio companies. The most relavent in the video surveillance market is Supercircuits who the Carlyle Group acquired in 2006 [link no longer available]. A year ago Supercircuits and Digiop partnered [link no longer available]. Digiop is already Supercircuits lead VMS offering. While details were not disclosed of future plans, we believe it is reasonable that this relationship will continue, if not expand. Note: Digiop said that they will be continuing to build their own channel sales organization to sell through integrators.

Future Growth

Digiop reports that its product strategy centers on tightly integrating data and video to improve operational intelligence for retailers. While the company already supports PoS integration and video analytics, it will release a new VMS version this Spring that more deeply integrates data and video into a single application.