Similarity Systems agrees takeover

A DUBLIN technology company which had retained losses of €2.3 million at the end of 2004 has been sold for about €45m.

Similarity Systems, which develops software so company data is up-to-date, said it has agreed to be taken over by Nasdaq-listed Informatica Corporation.

The main beneficiaries of the deal will be Similarity Systems’ chief executive and founder Garry Moroney, businessman Jim Mountjoy and the venture capital firms Delta Partners and Trinity Venture Capital.

No jobs losses are expected to follow, though the takeover will lower Informatica’s earnings this year.

In a statement, Mr Moroney said: “We are pleased to pair the synergies of our two companies - combining Similarity Systems’ innovative data quality expertise and technologies with Informatica’s market-leading data integration platform.

“The combination of our products will create a comprehensive, unified data integration offering that empowers the right people in the organisation to deal with data quality while delivering the broadest range of data integration projects for our global customers.”

Similarity was founded in 2001 and has offices in Texas, New York, Munich and Birmingham. It employs more than 50 people.

According to the most recent accounts available, which are made up until the end of 2004, the company’s retained loss increased to €2.3m at the year end, from €1.34m in 2003. No figure on sales was available.

Although Similarity was loss-making in 2004, its backers have remained faithful, pumping €7m into the firm, which has also been on the acquisition trail.

Informatica said it believes the two firms were be among the biggest in the data integration market.

“Data quality is ranked by our customers as one of their top challenges within their broader data integration projects,” it said.

“We selected Similarity for their best in class capabilities that will integrate well with our data integration platform to address the requirements of customers.”

Informatica made a profit of €28m in 2005, on turnover of €220m.

The company’s shares were trading up 12% last night, valuing Informatica at close to €1 billion.

The deal to buy Similarity Systems is all-cash. It is not known if the company’s staff will benefit from the takeover.