It’s been a whirlwind week for Steve Byrne, one he likely wouldn’t have imagined a year ago.
The CEO of Edmonton-based Montage eIntegration Inc. saw his e-business company snapped up for $90 million in a cash-stock arrangement with the country’s largest national broadband business services provider.
AT&T Canada closed the deal last Tuesday, which will see Montage become its e-business unit combined with DMC, a Toronto-based “web-enablement” firm acquired by AT&T last June.
Byrne will now head the Montage. DMC E-Business Services division, which will offer consulting services to develop and implement e-business strategies and help customers make the best use of emerging technologies and build on their existing systems.
“I don’t know that Montage was necessarily psychologically ready for an acquisition,” Byrne admits, as he recalls events leading up to the germination of the deal last fall.
“We’re a very strong company operating successfully independently. But I guess we had become of a size in Canada where we showed up on a lot of companies’ radar. It became a standard part of our business to entertain these opportunities.”
“Quite honestly, we weren’t really prepared to go down this path.”
Byrne calls the deal a “strategic fit,” particularly in light of the AT&T’s DMC acquisition last spring.
The telecom giant wanted to take its strategy to the next stage, he said, and find a firm that could provide national coverage in areas not yet penetrated by DMC, which specializes in electronic commerce applications.
Montage, founded in 1986, helps traditional companies and organizations understand the potential of the new economy by applying e-business strategies to their customer and supplier services and “leveraging efficiencies” throughout their supply chain. It counts Nortel Networks, JDS Uniphase, EPCOR and Enbridge among its clients.
AT&T Canada CEO John McLennan said the deal makes the new unit one of the largest providers in Canada focused exclusively on integration services with more than 600 e-business professionals.
“We are very pleased to be able to invest in the growth of e-business services in Canada and welcome MONTAGE, a Canadian leader in this market to our team,” McLennan said in a statement.
“This innovative e-business capability has global potential and is an example of how Canada can use its brainpower to compete at an international level in the communications industry.”
According to AT&T, the Canadian market for e-business services is expected to grow from about $499 million US in 1999 to a whopping $3.4 billion US by 2004. Montage has about 450 employees in Canada and the United States, with about 80 employees in both Edmonton and Calgary.
“There’s been so much excitement over the past couple of years about the sell side of e-commerce, with all the flash and flare around Web sites, and companies springing up out of nowhere trying to gain a lot of market share without necessarily making money. I think that really did our industry a lot of damage,” observes Byrne.
But the demand remains, and Byrne says the AT&T link will open up huge opportunities.
In addition, he says the company has just signed a high profile senior executive — to be announced within days — who will help drive the anticipated growth of the new e-business service division in western Canada, south of the border, and beyond North America.
Adds Byrne: “I just know we’re going to have all the tools we need to really grow effectively.”
