COA Solutions has added the 2007 Software Satisfaction Award winner ASR to its expanding HR and payroll software portfolio, which also includes OpenPeople (formerly Grampian), Goldenhill and Strata. John Stokdyk reports.
Like most previous COA acquisitions, ASR will operate as a separate business unit and will continue to operate from its existing headquarters in Harpenden. The terms of the deal have not been disclosed.
COA managing director Mark Thompson said the deal demonstrated the company’s determination to sustain its growth in the UK market for human capital management systems, which is estimated to be worth £240m.
Mark Lane, COA’s strategy and planning director, is responsible for tracking and negotiating the company’s acquisitions and said he had been looking for an HR subsidary for two years.
“The OpenPeople (Grampian) and Goldenhill acquisitions brought us strong payroll skills, but they didn’t give us a core HR system,” Lane explained. “We could have invested in developing HR functionality ourselves, but the time involved to get where we wanted get was simply going to be too long. We needed to be quicker, so acquisition was the way to go.”
ASR fitted COA’s criteria for a business that could quickly assimilate into its current portfolio; ASR’s HR Professional suite OpenPeople have already been integrated together at several client sites.
“ASR had 60 people who knew HR and they focus on that – they are agnostic from the payroll point of view and plug into all the leading players’ payroll products. They were an ideal match for what we were looking for,” said Lane.
Several companies came into the frame during COA’s HR software hunt, but the valuations were either too high or the acquisition wouldn’t stack up for other reasons. “Many companies in that area have a payroll product – and we didn’t need that,” said Lane. “The dream solution for us was a company that only had HR. We took our time and trusted that what we wanted would become available.”
In Lane’s words, COA “got lucky” when it was introduced to ASR’s founders who were interested in completing a transaction quite quickly – and COA was ready to oblige.
For COA, the value in adding ASR to its portfolio comes from the opportunities to cross-sell the application to different user communities. “When we acquired Strata, they brought a very well respected human capital solution for HR analytics. It bolts into any HR or payroll product, which has enable us to drive its growth. We’ll be taking that product to the ASR user base, where bigger customers will be very interested. Payroll will be another area – with Goldenhill, we’ve got a Java-based payroll application that is perfect to bolt onto the ASR product.”
In the case of COA’s Version One document management acquisition, cross-selling has boosted revenues by a third – and provides another angle for ASR’s customers in HR, where there’s growing interest in paperless systems, said Lane.
While this internal selling activities goes on, ASR will also be left to continue its existing sales strategy. “ASR has always positioned itself as a standalone solution for the HR function and we’re not going to stop them doing that. They have sold into competitors’ accounts and we’re not going to discourage them from doing that,” said Lane.
The ASR team will also carry forward development and support. “During our investigations, we satisfied ourselves that a sensible roadmap can be built going forward with payroll alongside ASR,” said Lane. “One thing we won’t do – unlike some of our competitors – is de-support any products. Everytime we make an acquisition, we support all the prods we acquire. What we’ve got today adds value to each other, so the roadmap won’t be a challenge.”
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COA (formerly CedarOpenAccounts) is a UK-based conglomerate assembled by venture capitalist Jon Moulton’s Alchemy Partners group. Over the past few years, our sister site AccountingWEB has documented COA’s expansion into the HR market. For more background information, see:
CedarOpenAccounts buys Grampian HR and payroll
The secrets of Alchemy: Jon Moulton’s turnaround tips
CedarOpenAccounts ready to step into the limelight
