Hillington Park Innovation Centre; community at work
Damovo partners WBM in video conferencing deal.
DAMOVO, the fast-growing Glasgow-based telecoms hardware and service supplier, yesterday said it had signed a £160m partnership deal with a small Scottish hi-tech firm, a move likely to bolster the fortunes of both companies.
The deal between Damovo - the enterprise solutions division of Swedish mobile phone giant Ericsson until a management buy-out last May - and Hillington-based Web Broadcast Media (WBM) is Damovo's 26th alliance in its nine-month life.
In another revelation, Dam-ovo's Irish-born millionaire chief executive, Pearse Flynn, also said he planned to float the company by the middle of next year, by which time he expects annual sales to be £1.45bn, double the current turnover.
A company spokesman added that the flotation was likely to be made on the London Stock Exchange, but that decision was certain to involve considerable input from Apax Partners, the private equity investment firm which owns 80% of Damovo.
For WBM, the 20-staff developer of interactive desktop video and conferencing systems, the Damovo partnership is its biggest deal yet, and one almost certain to increase turnover by at least twenty-fold this year alone.
Under the terms of the three-year agreement, WBM will provide its internet conferencing system to a number of Damovo's clients. Revenue from the partnership is expected to generate £160m, both firms said.
The technology is aimed at call centres and corporate communications, whereby clients and staff can receive video images of each other over the internet during phone conversations.
The WBM alliance is yet another stepping stone in Flynn's ambition for Damovo to become Scotland's biggest global telecoms solutions firm by 2004.
In yet another announcement, the company yesterday said it had struck a £4.4m three-year telephony services contract with business centre operator Regus.
Damovo currently operates in 18 countries around the world, already has dozens of long-term contracts under its belt and employs 2700 people worldwide.
When the company moved to its global headquarters in Glasgow late last year, Flynn said he planned to create 140 jobs by the end of 2002. He hit that target last month, and said he hopes to boost staff numbers again.
"Expect even more partnerships this year. And by the middle of the year, expect a lot of acquisitions. It's all part of the vision," he said.
Referring to the WBM deal, he added: "When Damovo was still a start-up operating out of the Innovation Centre in Hillington, I bumped into Jim Park, the CEO of Web Broadcast Media, in the coffee room. He started telling me about his interactive video technology and I thought, this is exactly what all these call centres need, a human face. Now we're giving them a market for that technology around the world.
"That's what we do, look around to see what technology is available and how we can put it together for corporations. Technology never works straight out the box. The day it does, firms like us will be out of business."
The first sale in the WBM alliance is set to be signed in two weeks. Both firms declined to name the client, but said it was a call centre for a building society. Park said: "This alliance is not just incredible for us, but it's also great for Scotland. We have two Scottish firms providing Scottish-developed technology around the world."
Park, whose firm last year made a pre-tax profit of £100,000 on a turnover of £2.2m, said those figures were likely to increase as a result of the Damovo alliance. He also expected his staff number to rise to 60 by the year end.
Mark Smith The Herald 280202
