Alterian, Tikit boosted by acquisitions

(By Anthony Miller) A couple of our smaller players released trading updates today. Marketing software firm Alterian reported an ‘in line’ quarter (to Dec. ’08), helped by its acquisition of Mediasurface earlier in the year (see Alerian is disclosed as Mediasurface buyer). Management retains a ‘positive’ outlook on Q4 (to March ’09). Legal & accountancy sector player, Tikit, also reported a ‘satisfactory’ H2 (to Dec. ’08), again boosted by an earlier acquisition (TfB). However, management expects tougher trading in 2009 but still hopes to grow profits and EPS with ‘strong cost control’.

We are sure to see more M&A in the industry this year as players look to grow their businesses in the face of declining demand. There’s a balancing act here, of course. On the one hand, you gain share, but this cannot be at the cost of margin and cash flow. This makes the selection of M&A targets even more critical, and leaves no room for error in integration.