ECi Looks to Grow Through Acquisition—So Does FMAudit
On March 10, Fort Worth, TX based eCommerce Industries, Inc. (ECi) announced it had purchased FMAudit, LLC of Jefferson City, MO. ECi, as the name implies, markets a range of e-commerce solutions and other business software designed for specific industries including companies that sell and maintain office equipment. ECi will add FMAudit's print management tools and data collection applications to its software offerings for the dealer channel, which currently includes the popular La Crosse and OMD business management solutions.
While specific details of the acquisition were not disclosed, Kevin Tetu, president and founder of FMAudit, says his company will be a wholly owned subsidiary ECi and will be operated as a separate business. Mr. Tetu will remain at the helm and the rest of the company's senior management team will stay in place. He is not expecting widespread layoffs as a result of the acquisition and says, "In fact, we'll be adding new team members." There will be some changes, however. FMAudit headquarters will be collocated with ECi's OMD unit, which is also in Jefferson City. Mr. Tetu says combining the offices will improve efficiencies. He would not rule out the possibility of some redundancies in the workforce after the move, which could result in a few lost jobs.
Mr. Tetu says that the ECi acquisition will fuel additional growth for FMAudit. "We are really excited about the acquisition. It allows us to grow in new areas and enhance our offerings. It's really great news for our customers and we'll be able to add new clients." Mr. Tetu indicated that the FMAudit brand will continue to be used. "We've invested heavily in the FMAudit brand and it's well known in the market place," he explains.
It appears that the FMAudit acquisition will follow the course set by other ECi buyouts. The firm has a proven track record of growing through acquisition. ECi now caters to a diverse mix of what its website calls "micro-niche vertical businesses." It supports lumber and building materials and janitorial services companies with software as well as firms that market office products and equipment. It has acquired a couple of key technology vendors in the office equipment space. In 2006, ECi acquired OMD, which targets its business solutions at small to medium sized office equipment dealers with annual revenue between $500,000 to over a billion dollars. In 2007, ECi acquired OMD rival La Crosse Management Systems. In both cases, the firms have been run independently and the brands have survived.
FMAudit's Secret Sauce
Established in 2004, FMAudit was one of the first companies in the data collection space. The company's technology supports TCO reporting as well as consumables monitoring and service alerts. The firm offers a range data collection technologies including its Viewer USB for running initial print assessments and its web-based WebAudit application as well as Local Agent for capturing data from meters non-networked device meters. In addition, the company also offers FMAudit Onsite software, which runs on a client's server.
The secret sauce in FMAudit's technology is its ability to synchronize with ERP systems. The FMAudit solution can map devices with clients and accounts. Using bi-directional ERP synchronization, FMAudit pulls data from an ERP system and matches it with specific devices and pushes meter read to generate invoices.
Prior to the acquisition, FMAudit has been a partner with ECi and its technology is integrated with the La Crosse and OMD ERP systems. Mr. Tetu says that FMAudit will soon be integrated with other ECi ERP systems including the DDMS and Britannia systems for office product markets. "We expected our data collection to support other activities like cartridge acquisition or service calls. We'll be provide assets for new customers like office supplies vendors and IT VARS."
FMAudit has been enjoying growing popularity especially over the past few years. It's widely believed the company has gained market share from its largest competitor PrintFleet. Just days prior to the acquisition, the firm celebrated the 100,000th installation of its FMAudit Onsite device data collection software. The company has an impressive roster of OEM partners, including Canon, Dell, HP, Konica Minolta, Kyocera Mita, Lexmark Muratec, Océ, Ricoh, Samsung, Savin, Sharp, Toshiba, and Xerox. The firm also works with a range of companies on the cartridge-side of the business including CDW, Inkcycle, LMI, Printer Essentials, and Supplies Network.
In addition to its various hardware and supplies partners, FMAudit has partnered with some of the industry's leading ERP vendors. Beyond ECi, the company's data collection technology interfaces with Digital Gateway, Evatic, Jim2 Business Engines Nexent Innovation, and Signature Software. Despite the fact that ECi competes directly with some of these firms, Mr. Tetu says the relationships are sound. I asked him specifically about the relationship with Digital Gateway. "It will remain intact. We've been having conversations since the acquisition has been announced and we are discussing how we can expand the relationship."
I think the acquisition is a good move for both ECi and FMAudit. The deal will allow FMAudit's technology to reach more customers as Mr. Tetu indicated. I'm skeptical, however, that other ERP vendors will be as quick to embrace FMAudit as they had in the past. Mr. Tetu's comments notwithstanding, it seems likely that ERP companies such as Digital Gateway would feel more comfortable working with other data collection companies like Print Audit or PrintFleet rather than cozying up to the competition.
Posted by Charlie Brewer on 03/16/2011