EDB to acquire Swedish tech consultancy Drop IT

Source: EDB Business Partner

EDB has entered into an agreement through its wholly owned subsidiary Guide Konsult AB to acquire the Swedish IT consulting company Drop IT AB.

Entering into this agreement strengthens EDB's platform for IT consulting, and brings leading edge expertise in Internet content services. Dropit reported turnover of SEK 46 million for 2005 with an EBITA margin of 15%. EDB has agreed to pay SEK 45 million for the business acquired, which has 50 employees.

Dropit will operate as a separate company in the EDB group, and will be organised as a subsidiary of EDB's wholly owned subsidiary Guide Konsult AB. These two companies will together offer products and services for the complete value chain from Internet-based customer dialogue through to the integration of complex business systems.

"This acquisition gives EDB new striking power in our focus on IT consulting and application services in Sweden. In terms of both products and customers, Dropit will complement the exciting business that EDB acquired earlier this year through the acquisition of Guide Konsult", comments Endre Rangnes, CEO of EDB.

Information on Dropit
Dropit is a Swedish IT consulting company that specialises in content management solutions, particularly EpiServer solutions and .Net technology. The company has a strong position in the Swedish market for Internet solutions in these areas, and works with its customers both strategically and operationally. The company's customers include a number of major Swedish and Nordic businesses. Dropit was established 10 years ago, and operates from Solna on the outskirts of Stockholm and from Gothenburg. Over the last three years the company has achieved annual growth of 40%, and reported turnover of SEK 46 million for 2005 with an operating profit of SEK 6.7 million.

Information on the transaction
The agreement provides for EDB's wholly owned subsidiary Guide Konsult AB to purchase 100% of the shares in Dropit for SEK 45 million. In addition, the agreement provides for a possible earn-out payment based on the company's performance through to 30 April 2007. The shares are being sold by a group made up of the company's founders and employees, together with the Sixth Swedish National Pension Fund (the Sixth AP Fund). Dropit will continue to operate as a separate company, and will join the EDB group as a subsidiary of Guide AB. Dropit will continue to be led by its current managing director, Jesper Nyhlin. The founders of Dropit have undertaken to continue to work in the company for at least a further two years. The acquisition will take place with immediate effect, and the company will be consolidated in EDB's accounts from May 2006.

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