Consolidation in the business intelligence market: Wortell takes over Sigma Data Consulting
For six years, everything was going swimmingly for data specialist Sigma Data Consulting (SDC), but the coronavirus pandemic gave owners Vincent Wylenzek and Bart Brolsma food for thought: they realised that they were vulnerable as an organisation. Around the same time, several interested buyers came out of the woodwork. This eventually led to an acquisition by Wortell, a specialist IT business part of the Holland Capital investment company. Marktlink introduced the parties to one another and acted as a sales consultant for SDC.
Organisations and businesses around the globe are increasingly using data to make informed decisions. Over the past few years, the gathering, processing and automatic analysis of data has become an essential element of nearly all business strategies. This process of digital transformation has suddenly gained momentum as a result of the pandemic. The Sigma Data Consulting (SDC) team — which consists of around fifty data and AI specialists — helps organisations develop and implement a wide range of data solutions, and business has been booming for a number of years.
Vincent Wylenzek, one of the owners of Sigma Data Consulting, was on a skiing holiday in Austria at the start of March 2020 — just before the world went into lockdown. “I remember that my phone just wouldn’t stop ringing while I was on the slopes: contracts were being delayed and projects were being cancelled as a result of the pandemic. On top of that, my partner Bart came back ill from his skiing trip. We’ll never know whether he had coronavirus — testing was still in its infancy back then. In any case, he was severely under the weather for a couple of weeks. All in all, our woes just kept piling up.” It was a genuine wake-up call for both owners: they suddenly realised that they were in a vulnerable position as an organisation.
“In the end, it turned out to be no more than a storm in a teacup: all our consultants were back at work by May”, Vincent reflects. “But we couldn’t be sure of that back in March. The seed of doubt had been sowed. Everything had gone swimmingly for us for six years, but was this the time to take a step back and look at the bigger picture? We put our heads together to explore how we could spread our risks more optimally. We came up with a plan to develop various products and solutions that we could offer on a subscription basis, including management, maintenance and service. This kind of structural, continuous income would leave us less susceptible to setbacks.”
A working group within Sigma Data Consulting immediately set about developing the necessary products. The task ahead was huge. “In June, we established contact with Holland Capital through Marktlink. Holland Capital had told Marktlink at an earlier stage that it was looking for businesses in the BI and AI sector, and they soon put two and two together. We entered into discussions on a no-obligation basis, but we really clicked with Holland Capital, and they saw something in our plans for growth through product development. Several other interested parties got in touch across the same period, but we kept those at bay. Everything simply felt right about Holland Capital, so we decided to explore that avenue further. We kept an open mind at first, but things got pretty serious further down the line.”
A new direction
After the summer holiday and following several discussions, the owners of Sigma Data Consulting signed a Letter of Intent agreeing to an acquisition by Holland Capital. “Based on the understanding that we would continue as a standalone company under the wings of Holland Capital, we started the process of due diligence”, Vincent explains. “There was a lot more to this process than we thought; it took quite some time to complete.” As one of the Holland Capital portfolio companies, Wortell caught wind of the proposed acquisition, and its CEO, Danny Burlage, came up with the idea to merge Wortell and SDC due to their synergies. The combination would prove fruitful for all parties involved. “Danny’s vision and our vision were aligned. On top of that, we complement one another perfectly in terms of our offer and services. Wortell is widely known as the number one Microsoft partner in the Netherlands, and as a specialist in office automation. They hadn’t really ventured into the area of data science, business intelligence and AI just yet, but they certainly aspired to do so. And that’s how the acquisition process took on a whole new direction.”
Plenty of benefits to working together
At the time, Sigma Data Consulting was a healthy, well-functioning business. “That said, we had reached our limit in terms of management,” Vincent explains. “Bart and I were the executive team, and we were the only ‘overhead’ to boot. There was nothing wrong with that in our setup at the time, but in order to keep growing, we needed to drastically overhaul our organisational structure. We needed to add supporting functions such as marketing and communication, sales and HR. If we’d decided to forge ahead independently under the wings of Holland Capital, we would have needed to make that transition all by ourselves, but merging with Wortell was like stepping on board a moving train”, he continues.
“For the time being, we’re keeping our own name, plus a great degree of autonomy. That said, we are doing so as part of a wider club: Wortell, and indirectly, Holland Capital. And that offers a whole range of benefits: more colleagues, more customers and greater brand recognition, access to a huge sales organisation and sound account management, more capacity and a significant expansion of our services.”
The road to the final signature
There were still a few obstacles to overcome before the deal could be concluded. Partially due to the deal changing course and to the fact that new parties entered the fray, the due diligence process regularly ground to a halt, and that caused the closing date to shift more than once. “As we had a great experience with Marktlink during the preliminary process, we asked this business to continue supporting us during the sales process. I’m really pleased that we had a team of Marktlink consultants by our side”, Vincent asserts. “We would never have been able to do this by ourselves — the deal would never have been concluded that way. We’ve been building Sigma Data Consulting for years, so the company was like a child to us. On the one hand, that adds a lot of emotion to the acquisition process. On the other hand, there’s a huge amount of hard work to do: gather information, properly assess contracts and documents; the list never ends. Our consultants were happy to help at any time of the day — or night, if needed.”
The future is bright
Eventually, the sale agreement was signed just under a year after the initial seed for the idea was sown. “Our vision was to be the number one provider in the field of data science and AI. We would never have been able to achieve that on our own, so we’re really pleased with this deal. We found a strong partner to work with in Wortell, and we can keep a stake in the business at the same time. On top of that, our product development plans picked up the pace straightaway, and the first innovative solutions are already available on the market. After all, that was the driver behind all of this!”
“To our employees, the acquisition initially came as a surprise — because our business was doing so well — but we had one-on-one conversations with everyone, and they realise this acquisition will bring nothing but benefits. In fact, very little is changing for our employees. It’s great to see how our services complement those of Wortell and vice versa; we’re already seeing interactions with clients who are buying a complete package with multiple services — including our data solutions. Together, we can take care of our customers’ every need.”