Lumine’s Sharpley: We’re buyin’, but we ain’t sellin’

• Telco software group is in acquisitive mood
• It has acquired 23 companies, including seven in the past 20 months
• Senior exec and telco software veteran David Sharpley says more acquisitions are in the pipeline
• But once companies are acquired, they are definitely not for sale, says Sharpley

The Lumine Group, the communications and media software company that is building up a portfolio of specialist vendors to nurture and grow via an increasingly aggressive M&A strategy, is set to carry on buying and expand beyond the 23 companies it currently already owns, but it has a strict ‘buy but don’t sell’ policy, according to one of its senior executives.

According to David Sharpley, a telecom software veteran who has worked at Amdocs, Bridgewater, Oracle, MetaSolv and Nortel in the past, is a group leader at Lumine with responsibility for a number of portfolio companies, the group is “very acquisitive” and will continue to add to its portfolio: “We’ve only just started – watch this space!” he told TelecomTV from his hotel in Tel Aviv, Israel, where he has been meeting staff who have joined the Lumine family courtesy of its latest acquisition, Tomia. (For details and background on Lumine and the Tomia acquisition, read One to watch: Lumine Group.)

And those staff, like those at the other 22 portfolio companies, can rest assured that they are not being acquired just to be pumped up and then sold on for a profit. “These companies are not for sale – we are never going to sell them,” insists Sharpley.

And there’s logic behind that strategy. Sharpley says that, during his career, when he worked at a smaller, specialist vendor such as Bridgewater Systems (acquired by Amdocs in 2011), there was always a certain degree of uncertainty about the future.

“Every customer would ask, ‘Where is your company going to be in five years’ time?’ And, of course, you didn’t know... And then when you’re at the big companies, customers are often complaining about who they should talk to, about who is making the ultimate decisions, and who is accountable for their relationship.”

At Lumine (pronounced ‘Loomin’), the team is aiming to get the best of both worlds – the nimbleness and focus of a small company that knows it is now part of a larger group forever, and one that has financial security because it’s backed by a giant listed Canadian company in the form of Constellation Software, a profitable and growing company that generated annual revenues of more than US$5bn in 2021, with organic revenue growth of 7% year-on-year.   

“I can say to customers, all these companies are backed by Constellation and we’re not going to sell... So often, the management at small companies are focused on the next funding round, figuring out how to secure the future. But here they don’t need to worry about that – they can just focus on the customers and the strategy,” states Sharpley.

So, what’s the next area of M&A focus for Lumine? Sharpley’s not giving any hints, in the same way he declined to provide any insight into the purchase price of, or any financial details about, Tomia.

He says there are so many areas for Lumine to explore to find companies that are among the market leaders in their field but which need help to grow further, or which are seeking a new ‘home’ because the current owner has changed strategic direction (an example of this is the acquisition of video streaming technology specialist Velocix from Nokia in 2018). But the company isn’t fixated on buying companies in any particular parts of the communications or media industries, Sharpley added.  

One thing seems certain, though – we likely won’t have to wait until 2023 to find out what Lumine is going to buy next.

- Ray Le Maistre, Editorial Director, TelecomTV