Kerridge Commercial Systems (KCS) has announced that it has reached an agreement to buy Dancik International, an ERP software company that provides integrated software solutions and professional services to the floor covering, ceramic tile, natural stone, and home décor industries.
KCS and Dancik powered by IBM
Like KCS, Dancik’s software works on the IBM Power series servers. With its headquarters in Cary, North Carolina its customer base is spread across the USA and abroad with customers in Canada, Australia, Bermuda, and South America. KCS already has software that covers industries such as Tile distribution but with the acquisition of the Dancik suite of products it will be able to broaden its appeal in that industry sector.
The Dancik developed software was developed after a year of research by the founder and CEO Mitch Dancik and aims to appeal to distributors, manufacturers, wholesalers, and large retailers. It provides specialised ERP software that met the requirements of companies working in the ceramic tile, floor covering, natural stone and home décor industries.
For Dancik this deal will open up more international markets without some of the inherent risks of International Business expansion. Kerridge have committed to offer the Dancik products in its own territories. KCS is currently headquartered in the UK and has offices in Ireland, South Africa and Holland.
For KCS this deal provides a quick route into the USA, expanding internationally is fraught with Risk. In acquiring a specialist company KCS not only brings in expertise that it does not currently has, it also enables it to do business far more easily in the USA than it has done previously. The US market is far larger than its existing markets and the potential is huge.
If KCS is able to use the Dancik reputation and resources as a platform to launch the K8 ERP suite into the US and Canadian markets. If it can grow its business into industries that are synergistic with the Dancik core market, such as distribution, then this could be a very successful acquisition.
Ian Bendelow, CEO of KCS hopes reality will concur with this analysis and commented: “This is a key strategic acquisition for us. It immediately gives us presence in the North American market and a platform for growth in this important region. Dancik aligns with our successful business strategy of focusing on trading and business management solutions for the distributive trades, including wholesalers, distributors, retailers, merchants and resellers.
Fundamentally both Dancik and KCS offer customers value by bringing functionally rich solutions that are vertically focused to the needs of our customer; continuous development that is highly responsive to our customers evolving market; and our people who have deep knowledge of our customer’s vertical market. Dancik and KCS are a great match.”
The announcement also infers that while Dancik will operate as an independent business unit it will go through a rebranding exercise to emphasize the synergies with KCS. This is a tricky task, the balance that the marketing teams will need to strike is that they don’t ignore the heritage of Dancik but enable KCS to build its own brand at the same time.
The balance they need to strike is one between KCS consuming the Dancik brand too quickly and Dancik becomes forgotten before KCS are known and doing it too slowly and KCS are not in a position where they can push K8 with any momentum.
Mitch Dancik, Founder and Chairman of Dancik International commenting the news shows why finding the right acquiring partner is important. Dancik commented: “The acquisition by KCS brings together two great companies with the desire to deliver focused solutions to the distribution market. The combined resources of the two companies will provide a critical mass for us growing sales and market share of all our products.
We are also really pleased to have found a company with matching values and the same level of ambition.” The staff will no doubt be pleased to hear that the cultures between the two companies are similar, but more importantly there will be an independence retained by Dancik that often disappears quickly.
It will be interesting to see how quickly KCS train the sales staff within Dancik and what expansion they support in the US. The cost of the purchase may be small compared the amount of investment that KCS need to make this acquisition successful.