ECI Software Solutions Inc. added to its list of ERP systems with the acquisition of Deacom Inc.
ECI Software Solutions, based in Fort Worth, Texas, has a number of cloud ERP systems aimed primarily at manufacturing and construction SMBs. Deacom, based in Chesterbrook, Pennsylvania, develops ERP systems for small to medium-sized process manufacturers, such as food and beverage.
The terms of the contract are not disclosed.
Deacom ERP is a platform for process and batch manufacturers that includes a set of core modules they need to run their business, including warehouse management, quality control, e-commerce and drop shipping. , according to the company.
Deacom will join ECI’s manufacturing division, which currently has about 14,000 manufacturing and shop floor customers worldwide, according to ECI Software Solutions. Deacom will serve as ECI’s global platform to serve batch and process manufacturing companies.
Filling a spot in the ECI product line
The acquisition of Deacom is an important part of 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, highly robust, cloud-based solutions in the manufacturing industry,” Heerey said. “We have a long heritage in discrete manufacturing, so we have a very strong presence there, but we’re still looking to grow, and one of the subsectors we looked at is batch and process manufacturing.”
ECI considered batch and process manufacturing players ERP marketand Deacom stood out for the quality of the products and its team, he said.
“Deacom is also quite far in the cloud progression, which is fundamentally important to us,” Heerey said. “We seek to accentuate growth in the priority areas in which Deacom has been successful, and then grow Deacom’s business organically within their market.”
Deacom has focused on the upper tier of the SMB manufacturing market, which will continue under ECI, as well as efforts to expand into lower tiers of the SMB market, he said.
The deal is a win-win for both companies, said Scott Deakins, COO at Deacom.
“Deacom, ultimately, has secured a great strategic investor in our product and our team to help continue to drive our domestic and international growth that we have targeted,” Deakins said. “ECI has much deeper pockets than [Deacom has]so that was a big driver behind that, but ECI is the perfect landing spot for Deacom because we fill such a nice white space for them, and there’s a good cultural alignment there, also for our team. “
These deeper pockets at ECI will help Deacom invest in its product roadmap and expand its footprint in the market, he said.
“Deacom was starting to gain a foothold in Europe, and ECI’s brand and organization should help accelerate that,” Deakins said. “Deacom can serve the unique needs of process manufacturers, but we can also play in the discrete market if you really wanted to. We’ve made a strategic decision in the past not to target that market, but that’s definitely something which we can discuss with ECI is moving forward.”
Benefits for both companies
The deal should help both companies, analysts said, as ECI expands its product portfolio and Deacom secures more investment and access to larger markets.
For ECI, the Deacom acquisition 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 IT consulting firm.
“Adding Deacom to the mix seems like 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 middle-of-the-road customers and gives Deacom the financial and R&D support 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 provider for the process manufacturing industry, said Shawn Windle, Founder and Managing Director of ERP Advisors Group, an independent ERP industry consulting firm based in Lakewood, Colorado.
Deacom acquisition by a larger, well-established ERP-centric company should help it expand 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 to its UI and UX,” Windle said. “ECI should develop Deacom as its process manufacturing game, which is beneficial for existing Deacom customers, who have less to worry about, now that ECI will likely accelerate the roadmap for feature upgrades .”
Jim O’Donnell is a TechTarget News Writer who covers ERP and other business applications for SearchSAP and SearchERP.