DataGroup Makes First of Five Acquisitions

Computergram International, August 13, 1999

DataGroup Plc, a fledgling UK IT services company, has made the first of five acquisitions by which it plans to offer a full set of services to the European market. The Hale, Cheshire-based firm has acquired Thesaurus Computer Systems Ltd, an IT services company based in Milton Keynes for an undisclosed sum.

Derek Lewis, the computer consultant who created the company with Andrew Needham, formerly head of corporate finance at legal firm Addlesham Booth & Co, says that this acquisition is "the bottom of the pyramid." The next four purchases, which Lewis hopes to complete within 18 months, will be in the areas of data management and warehousing, application development and maintenance, network management and consulting and "customer interface" which will include customer relationship management, e-commerce and digital television.

The business plan is oriented around flotation on the London Stock Exchange in September 2001. The company has been backed by venture capital investor Schroder Ventures which Lewis says will probably drop out after the initial public offering, in which the company will sell some 30% of the shares. Lewis estimates that DataGroup has about 150m pounds ($241m) to spend on the five acquisitions.

Lewis is an old hand at buying and selling IT firms. He established Combro Ltd in 1984 and sold it to MBS three years later for 8m pounds ($12.8m), remaining on the board, leading a management buy-out and renaming the company Technology Plc. He sold the firm in 1992 to ICL Plc for 42m pounds ($67.4m). Lewis has also worked with Schroders and has a relationship with the venture capital firm dating back ten years.