SumTotal Systems eyes more buyouts

As part of its four-pronged growth strategy, SumTotal Systems Inc, a provider of learning and business performance technologies, is looking at acquiring more products and companies.

"We have embraced a four-pronged growth strategy that includes growing our core learning management solutions, expanding our portfolio in the performance management solutions, expanding into talent management products and acquisitions. As part of this, we are on the look out for products in the areas of talent management space and learning and compensation management verticals," Sanjay Dholakia, senior vice-president (corporate and business development), SumTotal Systems, told Business Standard.

The company would look at firms that are typically under the recruitment management umbrella and its sub-segments like application tracking and assessment for acquisition, he added, while refusing to spell out any time frame or investments earmarked for the buyouts.

SumTotal had in 2006 acquired Mindsolve, a company with a patented talent management solution technology. It merged US-based Docent and Click2Learn with itself in 2004 that added $30 million to the company's revenues. It also acquired Pathlore Software Corporation, a learning management software and services provider, in 2005 for approximately $48 million.

SumTotal is the leader in the $500-million global learning management solutions market with a market share of around 25 per cent, followed by Saba Software with 15 per cent. The global learning management solutions market is growing at 15 per cent year-on-year.

"With the company expanding its footprint with new talent management solutions besides the growing business from partner channels, we expect our profitability to increase significantly this year. Our profits grew 10-fold last year to close at $7 million and we expect it to touch around $14 million this calendar year," Dholakia said.

SumTotal garnered revenues to the tune of $106 million in 2006 and its revenue outlook for the current year is $130 million. The company has around 17 million licensed users in over 1,500 customer organisations including over 60 of the Fortune 100 companies spread across five continents.

Its clientele list include Accenture, Citigroup, DaimlerChrysler, Delta Air Lines, Vodafone, United Airlines, Microsoft, Novartis and PNC Bank.