The J11: Atex systems were based on this computer for 15 years

Who is Sysdeco and why does it want Atex?

Should the Atex stock swap with Sysdeco Group AS go through, the resulting amalgam would offer a melange of products from three publishing suppliers, tied together with Sysdeco tools.

The Sysdeco Group first went public in 1993 and is traded on the stock exchange in Oslo, Norway. It has seven operating units, three for development and four for sales, and specializes in programming tools that allow the easy development of new applications, as well as geographic mapping systems.

Its holdings include relational databases, products for the gas and electricity business, and systems for health services.

Last year the Sysdeco Group started its Sysdeco Media division from the ashes of ND Comtec and ComIT, two bankrupt European publishing systems suppliers. About 180 European sites use Comtec, and Sysdeco Media has been actively supporting those users as well as developing new products.

Sysdeco is apparently quite anxious to be in the publishing systems marketplace, as shown by Germany-based Sysdeco Media's booth at last fall's Ifra, the European version of NEXPO.

Johs Jamne, the managing director and chief executive of Sysdeco, told of an earlier effort in publishing systems. About the same time it acquired Comtec, Sysdeco entered into a relationship with Cybergraphic Systems Pty Ltd., the Australian publishing systems supplier, Jamne said.

"We worked with Cybergraphic for about a year," Jamne said. "We actually did model with our toolset a new generation of advertising system." But the relationship fell apart, Jamne said, when the two companies could not agree on how to proceed.

Which brings Sysdeco to its current hunger for Atex and SyPress Oy of Finland.

"We have looked at both simultaneously," Jamne said of Atex and SyPress. "I would say we know a lot about the U.S. publishing market. We have been following this for some time."

SyPress, which is based in Oulu, Finland, makes integrated editorial, advertising, production management and circulation systems that use structured query language (SQL) databases and Windows workstations.

SyPress licensed certain portions of its classified system's code to Atex in early 1993, from which Atex has built Enterprise, its classified system.

Sypress is primarily owned by north Finland's biggest publishing company, Kaleva. The Sysdeco deal for SyPress is valued at about $11 million and includes not only cash but Sysdeco stock; some of the price is dependent upon fiscal 1995 financial results of the company.

The SyPress deal is independent of the effort to acquire Atex, even though they are being considered simultaneously. Jamne explained why Sysdeco needs to buy them.

"We believe you should own the products your are selling," Jamne said. "We think that when you have an advertising product like SyPress, that it should be owned by the distribution channel."

Jamne also believes Sysdeco has a lot to offer Atex users.

"The Atex customer base -- they're proprietary, flat files, J11. They all want to go client/server, and we are convinced we have products that will scale better today," Jamne said.

Jamne said he envisions Atex will provide its users with "a new generation of products that will be based on Sysdeco tools."

The Sysdeco deal for Atex is set at about $20 million, which includes a stock swap valued at about $12 million and repayments of loans to Atex investors of about $8 million.

A stock swap would keep the original Atex investors involved in the company. In addition to a group of Atex managers, investors are Janivo Holdings BV of the Netherlands, Euroventures Benelux BV of the Netherlands, Advent Ltd. of the U.K. and the South Yorkshire Pension Authority of the U.K.

Sysdeco is in fact smaller than Atex. Its 1993 revenues were about $33 million (Atex says its 1994 revenues will be $55 million) and it currently has about 340 employees (Atex says it has 350).

How can a smaller company buy a bigger one? "We're more profitable," said Jamne.

How exactly the Sysdeco Media group -- including Atex, SyPress and Comtec -- would be organized was to be determined during the due diligence phase (expected to last through mid-January).

Jamne indicated he planned to base the company in the United States. "I think we won't move more [of the operation] to Europe than it already is," said Jamne.

How would he combine the various product lines?

"We have to build on what we have, but what we have to avoid is to have several different products offered to the customers," Jamne said. "We'll probably have two editorial systems, but that has to be coordinated and restructured.

"How it will be done and where it will be done, we have to work more on."

-- dmc

From THE COLE PAPERS, January 1995, Copyright © 1995, All Rights Reserved.