STA, 27 August 2019 - There has been a noticeable trend lately in Slovenian information and communication technology (ICT) companies being acquired by foreign buyers, with the acquirers seeing the Slovenian companies as strong players with good potential.
The assessment comes from Nenad Šutanovac of the Association of Informatics and Telecommunications, who has told the STA that the market is getting interesting both in terms of potential targets and supply.
According to him, there are many reasons for the owners of Slovenian ICT companies willing to sell. "Some owners are, for example, older and they are thinking about whether to enter the market transformation or to sell the company instead."
Šutanovac explained that finding new markets is an increasingly important thing for such companies, which may be a tough task for some. "This is especially true for companies which did not have a well-developed sale network in the past."
He believes that strengthening sale strategies and synergies on new markets are the two key advantages brought by foreign ownership. "Of course, development also requires capital, which is lacking in Slovenia," he added.
The biggest ICT takeovers in Slovenia
Among the most important takeovers, Šutanovac singled out Hermes Plus, which merged at the end of the 1990s with the Austrian IT consulting, solutions and services provider S&T to get the name S&T Slovenija.
"This company was positioned well not only in Slovenia, but in the entire region," he said, also pointing to the sale of the software company Hermes Softlab to the Serbian group Comtrade in 2008.
Among the more recent acquisitions, he mentioned NIL, one of the largest IT suppliers, which was taken over in February by the Danish company Conscia, a leading European producer of ICT infrastructure and advanced ICT services.
As the Ljubljana-based NIL told the STA at the time, there would be no major changes in the company after the acquisition, and all jobs would remain in Slovenia.
Furthermore, the management software maker Infotehna has been acquired by Amplexor of Luxembourg to be renamed Amplexor Adriatic, while the US company Emphasys Software has acquired Halcom, a provider of banking software solutions.
Listing a few more examples, Šutanovac said that ICT companies in the country were also attractive to Slovenian companies from traditional industries, including the energy company Petrol and the industrial conglomerate Kolektor.
As of recently, Adacta Services Business, a leading Microsoft Dynamics, Qlik and Cornerstone partner in Slovenia, Croatia and Serbia, has been in ownership of BE-terna, a company owned by the German Deutsche Private Equity fund.
The transaction does not affect the part of business related to the development and implementation of solutions for insurance companies, which will stay under the wing of the parent company Adacta Holding.
According to Šutanovac, many companies see special potential in solutions for insurers and thus do not want to leave that market. "Opportunities for small companies in other fields are rather limited, so they tend to sell other segments."
He believes that even in the case when an ICT company is acquired by an equity fund, strategic development of the company is not necessarily threatened. "Funds too can look for compatibilities in the content, and not only for short-term profit."
Šutanovac expects that the trend is likely to continue, but he would like to see "domestic capital be stronger and the ICT sector get solidified by the merging of homegrown companies".
ICT job opportunities in Slovenia
According to him, the fate of the sector in Slovenia highly depends on the availability of staff, which have become pretty mobile in this field due to the globalisation of the ICT industry.
"What is more, the number of young graduates in Slovenia cannot meet the demand, and members of our association are looking for staff abroad, not only in the former Yugoslav republics, but also in Poland and Ukraine."
He added that Slovenia should focus on developing complex expertise and solutions and on innovation. "There is a lack of experts, but we have a high level of knowledge and high productivity and quality of software development."