Scalar becomes a $300 million dollar company through the deal, strengthens its presence in western Canada, and increases its scalability with the assets acquired. The Mainland brand will remain for the foreseeable future.
Toronto’s Scalar Decisions has greatly strengthened its presence in western Canada with the acquisition of Mainland Information Systems. The transaction is expected to close later in July.
“We feel we are creating one of Canada’s largest IT companies, combining the best of the best,” said Paul Kerr, Scalar’s president and CEO. “This was all about creating a big national integrator.”
In terms of the amount of business done and available personnel, the deal increases Scalar’s resources by 50 per cent. Scalar is a $200 million dollar company with 202 staff, while Mainland is a $101 million dollar company with 105 staff. Kerr also emphasized that rather than seeing any reduction in headcount as a result of the consolidation, Scalar will be expanding.
“There are now 50 open jobs in the combined company which we intend to fill,” he said. “It’s all about building a great national organization.”
Kerr emphasized that being bigger has major advantages for an integrator.
“There are huge advantages to scale,” he said. “Scale absolutely does matter for the ability to solve problems and we are in the business of solving IT problems. This puts more top resources at our disposal, which we can use to solve a problem anywhere.”
While Scalar has had a presence in western Canada since their acquisition of Vancouver-based XSM Systems in 2008, the deal significantly increases Scalar’s presence there.
“They were much more established in western Canada than us,” Kerr said. “We didn’t have an office in Edmonton at all. This gives us new business there, and much stronger business in Calgary and Vancouver.”
Kerr indicated that both companies have similar practice areas, notably in infrastructure and cloud. However, Scalar also has an extremely strong security practice, and that this will open up a new market among Mainland’s existing customer base, as well as strengthening them with new clients.
“They didn’t have a security practice at all, so this gives us an opportunity there,” he said.
While Kerr has known Mainland’s founder, Carl Rideout since Kerr started Scalar 11 years ago, the talks about the two companies coming together started several months ago.
“We had dinner several months back and began to talk then, and today is a culmination of that,” Kerr said. “Carl founded the company 25 years ago, and he thought that he has done this long enough and saw this as his opportunity to cash out. He will not be part of the integrated operation going forward.”
The management team who had been running Mainland in recent years is all joining Scalar though, and Kerr called that a huge asset.
“Carl put in place an unbelievable management team which he had entrusted with the business, and they are all coming over,” he said. Jason Born, who had been president of Mainland before, will continue in that role.
Looking ahead, the integration plan calls for both organizations to keep doing business much as they had before.
“The key thing is this isn’t an acquisition plan, but a consolidation of operations,” Kerr said. “They will do what they do, and we will do what we do, to build the best combined organization, which can best execute in the marketplace.”
To that end, the Mainland brand will continue for the foreseeable future.
“It’s business as usual for now,” Kerr said.