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Why Concurrent Technologies Bought Omnibyte for $1.5 Million in 2002

Concurrent Technologies bought Omnibyte in January 2002 for $1.5 million cash, adding VME embedded-computer designs and engineering talent.
From TheFinanceBase Team2 min to read
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Concurrent Technologies bought Omnibyte Corporation for $1.5 million in cash in early January 2002. The UK computer manufacturer said the deal would add embedded-computing designs and engineers, broaden its technology base and strengthen its presence in the United States.

What was the Omnibyte deal?

Concurrent Technologies Plc announced on 7 January 2002 that it had acquired Omnibyte, a company based in West Chicago, Illinois. The consideration was $1.5 million in cash. Omnibyte had 15 employees and designed and manufactured electronic microcomputer circuits and systems, including VME single-board computers built around Motorola PowerPC and 68060 processors. Concurrent’s acquisition announcement

Omnibyte’s former parent, Parr Instrument Company, was the seller. The purchase agreement warranted that Omnibyte’s tangible net worth at closing would be at least $1 million. Omnibyte also agreed to keep supplying certain products used in Parr instruments for at least six months after the sale. Acquisition announcement

Why did Concurrent buy Omnibyte?

Concurrent framed the purchase as a way to expand its engineering capability and improve its position in the US, which it described as the world’s largest market for its products. Chairman Michael Collins said Omnibyte would “widen our technology base” and “increase our design capability.” He also said it would give the group a platform to extend its US presence. Concurrent statement on the acquisition

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The deal addressed a practical constraint as well as a geographic ambition: Concurrent said an engineer shortage had limited growth. It valued Omnibyte’s engineering team, product designs and similar culture, and Collins said the acquisition offered access to a broader pool of design talent than was available in the UK. The acquired engineers increased Concurrent’s group engineer count by 40%. Concurrent statement 2001 results announcement

What did Omnibyte make?

Omnibyte’s work centered on industrial embedded computing rather than ordinary consumer PCs. It brought Concurrent existing single-board-computer designs and the expertise to develop them, particularly VME products using Motorola processors. Those designs complemented the group’s embedded-computer business and gave its engineers a platform for further product development. 2001 results announcement

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Was Omnibyte profitable when it was acquired?

Omnibyte’s unaudited accounts for the year ended 31 January 2001 reported turnover of $2,271,227 and pre-tax profit of $340,993. However, management expected an operating loss of about $430,000 in the then-current year. Concurrent said the $1.5 million price reflected Omnibyte’s lack of current profitability. These are historical, unaudited figures disclosed at the time—not measures of present-day performance. Acquisition announcement

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What happened after the acquisition?

Integration and development in 2002

At Concurrent’s April 2002 AGM, the company said integration was on schedule: Omnibyte’s engineers reported to Colchester, England, and Concurrent’s sales team supported and marketed the product range. AGM statement, 19 April 2002

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Concurrent’s 2002 interim results said Omnibyte had been fully integrated. The combined operation reorganized work and consolidated some activities to reduce costs, while accelerating development of embedded computers using PowerPC and 68060 processors. A new PowerPC VME single-board computer was being evaluated by customers, and management expected significant revenue from it in 2003. 2002 interim results

Products and reported contribution

Concurrent’s 2002 final results said Omnibyte had been integrated with Concurrent Technologies Inc and its design team had released several new embedded-computer products using Motorola processors. Omnibyte contributed £660,935 to group turnover in 2002. That reported contribution is for the acquisition’s first year, not a continuing annual figure. 2002 final results

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