A Surprising Reason to Expand Overseas

6 December 2012

by John Warrillow

Inc. magazine underlines the importance of geographic diversification for smaller businesses, showcasing DataArt as an example of a company with a robust business model and solid presence in several countries. Eugene Goland, President of DataArt, spoke with Cliff Olin, principal at Olin Capital Advisers, Inc. for this feature article.

"DataArt would be an attractive acquisition target for U.S. strategic acquirers who want more exposure in international markets,” says Olin. “And it would be attractive for private equity firms, both U.S.-based and international, that would see DataArt as a platform to enter fast growth markets like Russia and important financial centers like London.”

The more geographic diversification DataArt has, the wider the pool of potential buyers likely to be interested in them. For example, a U.K.-based custom software company wanting to increase their exposure to the U.S. market may see DataArt’s U.S. presence as attractive, while also appreciating the fact that DataArt is familiar with the way Brits do business.

DataArt’s geographic diversification also significantly reduces its risk profile, another plus for potential acquirers. Goland emphasizes that no one customer accounts for more than 5% of DataArt’s revenues. This customer diversification is a characteristic coveted by potential acquirers, and it further reduces DataArt’s risk profile.

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