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Mar 10, 2006

Global acquisition to benefit SA subsidiary

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Engineering|Africa|Marine|System|Systems|Africa|Automotive|Manufacturing|Product|Products|Services|Solutions|Systems
Engineering|Africa|Marine|System|Systems|Africa|Automotive|Manufacturing|Products|Services|Solutions|Systems
engineering|africa-company|marine|system|systems-company|africa|automotive|manufacturing|product|products|services|solutions|systems
© Reuse this During the last few years, the automotive sector has been characterised by mergers and acquisitions, which have not only been confined to vehicle manu- facturers but also to component and software suppliers within the industry.

The most recent example of this trend was the global acquisition of UK-based information technology (IT)-focused Kerridge Computer Company by US-based Automatic Data Processing (ADP).

Established in 1976, Kerridge has progressed to be one of Europe’s largest software houses providing complete and fully-integrated IT solutions for a range of strategic vertical markets, most notably the automotive sector. To this extent, Kerridge has become globally renowned for its Auto- line Dealer Management System, which has, arguably, become the most complete fully-integrated system for the retail motor industry and associated trades. This software program is an industry leader within the dealer management-systems market, suiting all types of outlets from single-site specialist dealers to multi- franchise groups with a number of locations. It is tailored to suit individual requirements and has a wide range of interface and file-transfer facilities to link dealers to manu-facturers, importers and other third-party systems. In addition to its range of software programs, Kerridge is one of the leading companies in the world in terms of IT research and develop- ment, contributing a substantial percentage of its turnover a year to this activity.

Thus, it was these reasons, together with the company’s strong presence in Europe, South Africa, the Middle East and Asia Pacific, that prompted ADP to pursue the $300-million acquisition of Kerridge last year. ADP, with $8,5-billion in revenues and approximately 590 000 clients worldwide, is one of the largest providers of a broad range of premier, mission-critical, cost-effective transaction-processing and information-based business solutions.

According to ADP chairperson Arthur Weinbach, the acquisition is an important part of ADP’s initiative for global expansion.

“Kerridge is a strategic fit with our dealer-services business which provides database management systems (DMS) and other integrated comprehensive solutions to auto- motive, truck, motorcycle, marine and recreational vehicle dealers throughout the US, Canada and Europe,” says Weinbach.

“The addition of Kerridge positions Dealer Services as the leading global DMS provider and partner of choice for the industry by expanding its geographic coverage from 14 countries on two continents to a total of 41 countries on four continents.” Ultimately, the acquisition of Kerridge by ADP has established a unique global capability to provide and support IT products for the retail automotive, vehicle importer and fleet markets.

However, the fundamental question remains: What does this global acquisition mean for Kerridge and its South Africa-based subsidiary? South African subsidiary Established in 1982 as a subsidiary responsible for deploying the company’s products in sub-Saharan Africa, the South African subsidiary of Kerridge Computer Company is primarily focused on marketing the Autoline program to the retail sector of the automotive industry.

The Johannesburg-based branch also concentrates on research and development into interfaces in manufacturing and third-party systems for functions such as parts ordering, warranty, customer- satisfaction-index submissions and customer-relationship management administration.

According to Kerridge sales manager Harm Stavast, the company has an estimated 40% market share of the franchised passenger-vehicle retail market, with its primary customer-base including DaimlerChrysler, Barloworld, Volkswagen and BMW. However, with regard to the acquisition of the holding company, Kerridge GM Paul Cronin contends that the future of the company will benefit enormously from being associated with a large organi- sation.

“Once the global acquisition is completed by midyear, we will be able to capitalise on the joint synergies and the market potential for our products,” Cronin tells Engineering News.

Although it will be a challenge for the company to adapt to the American culture of business, the future outlook of the company is overwhelmingly positive. “Fundamentally, the acquisition will enable us to invest more capital into growing the company’s already strong market share within South Africa and broaden our product offering to our local customer base,” concludes Cronin.
Edited by: Jade Davenport
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