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Access buys top reseller Armstrong Consultants

Colchester-based Access Technology Group has bought Armstrong Consultants, one if its leading resellers and developers, for an undisclosed sum. John Stokdyk reports.

The business fit between the two organisations is excellent and there are no plans for any redundancies on either side, said Access in a press release. Armstrong will now become part of the parent group, alongside another Access dealership, Asyst.

In addition to reselling Access software such as the Dimensions accounting systems, Armstrong develops its own software, including the FocalPoint web portal system for project management and accounting, and the new ImageIT document management system for Dimensions.

For the past two years, Armstrong Consultants has been listed the top 20 of the Sunday Times list of best small companies to work for.

Access group managing director Alistair O'Reilly has set the company on an ambitious growth programme to reach £100m turnover by 2017. The Armstrong deal will help it reach its interim milestone of £30m by 2010, the company said. In its last financial year, the company reported a profit of £1.7m on turnover of £9.1m.

"That plan involves buying vertical market software houses, rather than buying the channel," O'Reilly told AccountingWEB. "We are specifically looking for vertical software houses that outsource their accounts. Armstrong are a fantastic example of that. They are very active and successful in professional services and the service management market and never sell their software without selling ours. They fall right into the Access Technology Group plan.

"We have a very close relationship and it quickly became apparent that if we work together under one umbrella, they could help us get there faster."

The model for the Armstrong relationship is similar to Pumasoft, which Access acquired three years ago, O'Reilly said. "They were an alliance partner, selling one version of our software alongside theirs and we have more than doubled their business to £2m in three years. It would be nice to repeat that with Armstrong."

Richard Gyles, managing director of dhc, the 2006/7 Access Accounting 'Dealership of the Year', was not overly surprised by the Access-Armstrong deal and said it would make very little practical difference to other Access resellers.

Having dealt with both companies, Gyles pointed out that Access and Armstrong already worked very closely. With its emphasis on software development, Armstrong was not a typical software reseller, with its FocalPoint system being marketed by Access as the web portal system for Dimensions.

"Access and Armstrong have worked pretty hand-in-hand for the past 15 years on the development side. It makes sense and enables Access to have more control on product development," said Gyles. "The Access dealer channel is pretty well organised. While we have competed with each other, we tend to be pretty good at not going head-to-head on particular sites. The acquisition changes very little from that point of view."

O'Reilly emphasised that Access Accounting remained a channel-based business that would continue to support its resellers with centralised advertising and training. "We've proved with Asyst we can have a channel with independently owned businesses and group-owned businesses. The reason Access has survived as channel business is that it has differentiated what it does and what resellers do and has granted parity to the channel," he said.

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