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Econocom to Buy BIS Group in Benelux

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Econocom Group will acquire 100% of the shares of BIS Group, a leading AV systems integrator in the Benelux market, for about €18.5 million in cash ($20.2 million in cash less escrow and fees).

The seller is Mood Media, based in USA.

Subject to the approval of the competition authorities, this would add the €50 million turnover from BIS Group (220+ employees) to Econocom's  €2.5 billion (10,000+ employees).

For Econocom, this deal strengthens their "dynamic media market" (indoor and outdoor digital signage, video conference rooms, smart buildings, etc.) And it provides opportunities for business development in the Netherlands and new cross-business line implementation solutions for the Benelux.

[Shown in photo above] Yann Toutant, CEO of Econocom Netherlands describes the pro AV business of the BIS Group as "multimedia." Toutant notes this business segment grew 30% globally for Econocom in 2016, making BIS Group a good purchase.

As business editors, would agree, especially if you can buy €50 million in turnover for just €18.5 million. If you assumed a 5% profit or €2.5 million for BIS Group, then Econocom paid almost 8X earnings-- with the opportunity to leverage their own infrastructure to reduce costs while bringing in their wider client base to expand sales.

Toutant says, "With the acquisition of BIS Group, Econocom will be able to offer customers a complete usage-based model for multimedia integrations. The BIS professionalism, not only the technology, especially offers in-depth knowledge, combined with Econocom's technological management and financing expertise will result in a game-changing model of how companies will manage their investment and integration in the field of multimedia projects."

[Shown in photo above] Jean-Pierre Overbeek, CEO of BIS Group, adds: "Together with Econocom we can support organizations with more flexibility in anticipation of multimedia trends, rapidly embracing new technology and continuous innovation in the way people work and collaborate."


He also says, "We are going to make great propositions with the so-called pay-as-you-use models with the teams of Yann Toutant [Econocom Netherlands] and Bruno Ronsse [Econocom Belgium]..."

So the strategy is clear...the BIS Group/Econocom will push AV/IT-as-a service and end-to-end solutions.  Econocom has all the required qualities to ensure the implementation of large-scale digital projects; consulting, sourcing, technology management and financing of digital assets, infrastructure, application and business solution services and project financing.

The story is familiar: big IT company buys up AV specialist. With one new twist... Econocom is moving away from its IT image and describing itself as a company who develops, finances and supports the digital transformation of companies. OK, it is still IT as far as we are concerned but you can understand why the "digital transformation" is an important expression to catch the attention of corporate customers today.

The elephant in the room (or maybe even an hippopotamus in this case) is why is Mood Media divesting BIS Group?

Mood Media Corporation acquired BIS Group in 2012 for €22.5 million in cash. In the year ended December 31, 2011, BIS had revenue of €46.1 million and Profit Before Tax of €2.6 million. So Mood Media paid 10X earnings. And lost money on their sale to Econocom.

The acquisition, at the time, was in step with Mood’s growth strategy of driving organic sales growth by enabling the enlarged group to offer an expanded range of products and services.  The integration of BIS with Mood as supposed to offer further opportunities to centralise as well as realise economies of scale from the combined organisation. Yep, kind of like what Econocom wants to do.

But Mood Media is mainly an in-store media specialist that helps its clients communicate with consumers with a view to driving incremental sales at the point-of-purchase. The BIS Group services focus mainly on the commercial and institutional end users. And, today Mood Media is not in the mood to stray too far from its focus.

Steve Richards, President and Chief Executive Officer of Mood Media says, “This transaction marks another important milestone for Mood, as we pursue ongoing opportunities to simplify our portfolio, optimize our operating infrastructure, and focus Company resources on businesses and solutions that best enhance value for Mood clients and stakeholders. We remain aggressively focused on furthering Mood Media’s position as the clear global leader in elevating Customer Experiences.”

In short: Back to the future for Mood Media. A step forward for Econocom. And perhaps a leap into déjà vu for the twice-bought BIS Group.

Go Belgium Business Magazine on BIS Group Acquisition (in Flemish)

Go Econocom on BIS Group Acquisition (in Dutch)

Go Mood Media on Sale of BIS Group (in American English)