A £28m management buyout unveiled yesterday saw two information technology service companies transfer out of French ownership and back into Scottish hands in a deal that creates the country's largest independent IT business.
The MBO, which is being backed by Close Growth Capital and Scottish Enterprise, also marks the largest private equity deal in Scotland so far in 2009, and it ranks as one of the biggest transactions in the UK IT sector in recent years.
The newly-formed Amor Group was set up to acquire Glasgow-based Real Time Engineering and Aberdeen-based Pragma, both of which had been swallowed in recent years by Lyon-based technology conglomerate Sword Group.
Real Time, originally created by former employees of the old Yarrow shipbuilding empire in 1988, was acquired by Sword in November 2006, some 18 months after it acquired Pragma Systems in Aberdeen. Under their French parent, the two companies were amalgamated to become the Sword Business Technology Solutions unit.
Real Time provides consultancy and IT services to a string of blue-chip companies across the energy, transport, oil and gas, public sector and telecoms sectors, including BAA, ScottishPower and Centrica. Pragma specialises in providing IT services to the oil and gas industry.
The buyout is symbolic of the turmoil and seachange strategies being enacted throughout the hard-pressed technology sector - where one company sells off businesses to refocus on core activities and thus creates opportunities for consolidation and buyouts in other areas.
Some industry observers will argue that MBO activity such as this suggests that the economic downturn that started with the financial sector and eventually took its toll on corporate technology spending may now be beginning to stabilise.
The sale of the two Scottish businesses by Sword - which is listed on Paris's junior stock exchange, the equivalent of the UK's Alternative Investment Market - follows an announcement last year by the French group that it now intends to concentrate on software as part of a strategy shift.
Sword last year acquired Inchinnan-based software-centric Graham Technology in a deal that saw entrepreneur Iain Graham and his wife, Sheena, scoop a bonanza believed to have been worth around £23m.
John Innes, currently the chief operating officer of Sword Business Technology Solutions and one of the buyout team, yesterday told The Herald: "About 18 months ago, Sword announced to the market that its intention was to focus on software, rather than IT services.
"So we went to have a chat with Jacques Mottard, the president of Sword, and told him that if there was to be no further investment in the business technology solutions unit, then we would like the opportunity to buy it. So we spent the last 17 months putting a deal together in what has been the most challenging of climates."
Amor, which will be based at Graham Technology's headquarters at the old India tyre factory at Inchinnan, said its strategy will be to "further develop the established brands of both Pragma and Real Time by extending existing business, developing new capabilities and acquiring businesses which complement the Amor Group's service offering".
Pragma and Real Time will also continue to trade under their own brands with the same management and employee teams.
The buyout was led by Innes, who was also the former sales director at Pragma before it was acquired by Sword; Scott Leiper, Pragma's former account director; and David Blyth, the former chief financial officer of pre-acquisition Real Time.
Under the terms of the deal, the £28m buys the three MBO members and their backers a 77.5% stake in Amor, with the remaining 22.5% held by Sword. Innes will become Amor's chief executive, and Blyth and Leiper have been appointed chief financial officer and chief operations officer respectively.
Innes said: "This transaction is a solid endorsement of the quality of the Real Time and Pragma businesses and the exceptional talents of our people.
"To attract this level of institutional support in tough economic conditions is a measure of the confidence that investors have in the Amor Group's ability to deliver our business plan."
The new company has forecast £32m in revenues in its first year.
It has 330 staff in Glasgow, Aberdeen, Edinburgh, London and Houston, with expansion plans to increase turnover by a further £50m in three years.
Amor added that it plans to expand its workforce by creating around 50 new posts by the end of 2009.