US print firm inks deal with Sydney software maker

Printing giant Lexmark International has bought global search software maker ISYS, whose products are used in everything from defence, to the courts and intelligence.

US-listed Lexmark’s purchase of the Sydney-based software firm comes as it looks to build its software division.

ISYS was founded in 1988 and has wholly owned subsidiaries in the UK and US, and about 40 staff worldwide. It says the purchase will allow it to enhance its intellectual property base and more quickly achieve the next major stage of its commercial development.

The deal follows a year-long relationship between ISYS and Lexmark that morphed from a potential commercial partnership to an acquisition.

This is the first peer Australian purchase for Lexmark, although the printing and imaging developer and its new Perceptive Software unit has representation here. ISYS will be folded into the Perceptive unit.  

ISYS declined to name its sale price or revenue, saying only that the reported $32 million purchase price was not right and the sale price “wasn’t in the billions.” The company is believed to have exported about $100 million worth of software over its life.

Sean Howard – the publisher of Australian Personal Computer who later founded internet service provider OzEmail – Mark Rice and Ian Davies first owned the company.

Davies, a programmer by trade turned ISYS chairman, was the company’s major shareholder, alongside three other shareholders. He is no longer chairman although might serve as a consultant to the new owners.

Davies says after 23 years building the business, it’s too soon to discuss his plans beyond resting.

Davies says the size and influence of Australia’s software industry is often underestimated, and might attract further interest from printing companies attracted to the higher margins of software.

Questioned on his reflections of building the business, Davies says it comes down to the people.

“For a technology company, it’s really about intellectual property. We’ve had some awesome people working with us, many for 10 or 15 years. That’s what it comes down to.”

ISYS chief executive Scott Coles said in a statement that the purchase “recognises the fundamental strength of our business, our strategic direction and the scale of the market opportunity available in the new world of big data.”

“As organisations look to better identify, analyse and extract value from their expanding enterprise IT assets, the ability to effectively manage and leverage intelligence between the physical and digital world will become increasingly critical for business growth and competitive advantage.”

Paul Rooke, chairman and CEO of Lexmark, says that “ISYS has a tremendous business and technology heritage within its market, and will form a key part of our business process solutions that enable organisations to effectively manage their information assets.”