Excessively high valuations on technology companies are deterring technology services group Horizon from making further acquisitions in the Irish market.
"We have the ability to buy for cash; unfortunately we can't get people to be reasonable about price," said Cathal O'Caoimh, chief financial officer with Horizon.
O'Caoimh confirmed that Horizon was in discussion with a number of takeover targets but said it was highly unlikely that any deals would be closed until early next year.
"We have a couple of targets in the UK on the infrastructure side of the business but in Ireland we are more likely to buy consulting firms," said O'Caoimh. "As an organisation, we are risk-averse and tend to favour bolt-on acquisitions."
Horizon has had a large appetite for acquisitions in recent years - last year it purchased UK security and networking specialist Equip Technology, Irish SAP consultancy EPC and international e-learning player WBT Systems - but O'Caoimh notes that growth by acquisition is not an end in itself.
"Nobody in Horizon gets paid a bonus for making acquisitions," he said. "Bonuses are paid for earnings so the acquisition has to make sense."
He said the reason Horizon's acquisitions have been successfully integrated into the group is that the new business units are given as much autonomy as possible, which engenders an "entrepreneurial culture".
Last week, Horizon released an impressive set of results which showed that, despite growing revenues 11 per cent to €146.3 million, pretax profit was up 27 per cent to €4.68 million.
Horizon chief executive Gary Coburn explains this was as a result of focusing on services rather than sales of software or hardware. From its roots in hardware distribution in the 1980s, Horizon's Irish operations have morphed into what Coburn describes as application consulting in three broad areas - bespoke development, enterprise resource planning and data warehousing. Coburn says Horizon is now "the biggest IT services company in Ireland" and sells primarily to large corporate and government customers.
However, Britain now accounts for more than 80 per cent of group revenues, a figure that founder and chairman Samir Naji says is likely to increase.
The focus in the UK is on the provision of "enterprise infrastructure and services" and the company has relationships with some of the largest technology groups such as IBM, Nortel, Oracle, Juniper Networks, EMC and Sun Microsystems.
Rather than trying to compete with large system integrators such as Logica, IBM and Bearing Point, it acts as a reseller to those organisations fulfilling the infrastructure element of the contracts that the larger players have won. With both Oracle and EMC it has been appointed a channel development partner for the UK, which means it is exclusively selling to those companies' partners.
