Kienzle management buys out firm in quest for fresh markets

Fennell Betson

The former management of Kienzle Systems has bought out the company from Digital Equipment in a surprise deal and formed a new company Axxia Systems.

Axxia managing director Stuart Holden says the buy-out team wanted to eliminate speculation so the transaction was kept under wraps until the deal was completed. "We suggested the concept last autumn and made a formal proposal in January."

Kienzle grew by 26 per cent last year with revenues of u6.7 million and is profitable, says Holden. "The main reason for Digital divesting itself of Kienzle was that it no longer fitted in with its core business."

When it bought the company four years ago Digital was interested in software applications. Now the company is concentrating on hardware.

"But because we were making money, there had been no great urgency about Kienzle's future."

But the future with Digital was uncertain long term. The deal was an amicable one, says Holden. The financial aspects are being kept confidential. "We are doing what is right for our customers," he says.

The change will mean the management will "no longer have to play politics" in such things as head count controls. There will also be more resources for the support desk and more flexibility to respond to customer needs.

Although Axxia will sell other hardware, it will have a "special relationship" with Digital. But Holden does not see this as an issue with the reliability and price of its server products.

Axxia has clinched one of its biggest deals so far, with Leeds-based Booth & Co for an Arista system.

Holden believes Axxia can be suppliers to the top 20 firms. It is just a matter of beating Elite, he says. Arista has come on tremendously and can now match the competition on functionality, and it has more features, he claims. "We will crack this market in time."

Axxia is also looking seriously at the Scottish market and believes there are openings for it in the US.

It is expanding elsewhere on the back of its existing customers which want their overseas offices in Europe, Hong Kong and elsewhere on their systems. All 50 Kienzle people employed have been offered positions at Axxia. The other directors include Ray Wright, Bob Hadingham and Doug McLachlan.