ECI Software Solutions Inc. added to its roster of ERP systems with the acquisition of Deacom Inc.
Fort Worth, Texas-based ECI Software Solutions has a number of cloud ERP systems aimed primarily at SMB's in manufacturing and construction. Deacom, based in Chesterbrook, Pa., develops ERP systems for small to midmarket process manufacturers, such as food and beverage.
Terms of the deal were not disclosed.
Deacom ERP is a platform for process and batch manufacturers that includes a core set of modules they need to operate their business, including warehouse management, quality control, e-commerce and direct delivery, according to the company.
Deacom will join ECI's manufacturing division, which currently has about 14,000 manufacturing and job shops customers worldwide, according to ECI Software Solutions. Deacom will serve as ECI's global platform to serve batch and process manufacturing companies.
Filling a space in the ECI product lineup
The acquisition of Deacom fills an important space in ECI's product lineup, said Matt Heerey, president of the manufacturing division at ECI Software Solutions.
"ECI is focused on being a global provider of vertically specific, very strong, cloud-based solutions within manufacturing," Heerey said. "We have a long legacy in discrete manufacturing, so we have a very strong foothold there, but we're always looking to expand, and one of the sub-verticals that we looked at is batch and process manufacturing."
ECI considered players in the batch and process manufacturing ERP market, and Deacom stood out in the quality of the products and its team, he said.
"Deacom is also quite a ways down the cloud progression, which is fundamentally important for us," Heerey said. "We're looking to accentuate the growth in the focus areas that Deacom has been successful at, then look at growing Deacom's business organically within their market."
Deacom has focused on the top tier of the SMB manufacturing market, which will continue under ECI, along with efforts to grow in lower tiers of the SMB market, he said.
The deal is a win-win for both companies, said Scott Deakins, COO at Deacom.
"Deacom, at the end of the day, got a great strategic investor in our product and our team to help continue to drive our domestic and international growth that we've been targeting," Deakins said. "ECI has much deeper pockets than [Deacom has], so that was a big driver behind this, but ECI is the perfect landing spot for Deacom because we fill such a nice white space for them, and there's good cultural alignment there, as well for our team."
Those deeper pockets at ECI will help Deacom invest in its product roadmap and expand its market footprint, he said.
"Deacom was starting to make a foothold in Europe, and ECI's brand and organization should help accelerate that," Deakins said. "Deacom can handle the unique needs of process manufacturers, but we can also play in the discrete market if you really wanted us to. We made a strategic decision in the past not to go after that market, but that's certainly something we can discuss with ECI going forward."
Benefits for both companies
The deal should help both companies, according to analysts, as ECI expands its product portfolio and Deacom gets more investment and access to larger markets.
For ECI, the acquisition of Deacom is consistent with its strategy of targeting specific industries, according to Eric Kimberling, CEO and founder of Third Stage Consulting Group, a Denver-based enterprise computing industry consulting firm.
"Adding Deacom to the mix seems to be a good way to augment their past acquisitions of other manufacturing systems like Macola and JobBoss, which are two systems that tend to focus on smaller manufacturers," Kimberling said. "Deacom is a solid addition for their more midmarket clients and gives Deacom the financial and R&D backing of a major player in the enterprise software industry."
The acquisition refreshes ECI's product portfolio and has the potential to elevate ECI Systems as an ERP vendor for the process manufacturing industry, said Shawn Windle, founder and managing principal of ERP Advisors Group, an independent ERP industry consulting firm based in Lakewood, Colo.
Deacom's acquisition by a larger and well-established ERP-centric company should help it extend its reach in the ERP market, he said.
"ECI should be poised to invest in Deacom's ongoing cloud conversion and, hopefully, focus on an upgrade of its UI and UX," Windle said. "ECI is expected to develop Deacom as its process manufacturing play, which is beneficial for existing Deacom customers, who have less to worry about, now that ECI will likely be expediting the roadmap for upgrades to feature functionality."
Jim O'Donnell is a TechTarget news writer who covers ERP and other enterprise applications for SearchSAP and SearchERP.