Rapid consolidation awaiting Baltic IT sector

  • 2000-01-27
TALLINN (BNS) - The ownership structure of information technology companies in the Baltic states will have changed beyond recognition in one year's time, and the market will be controlled by three or four major players, the CEO of Microlink, largest IT group in the Baltics, said on Jan. 25.

"The changes will occur through mergers of companies, takeovers, selloff to Western investors, or bankruptcies," Microlink's Chairman of the Board Allan Martinson said at the presentation of Microlink's more than year-long survey of Baltic IT companies and the market by Microlink.

Microlink launched the survey with the aim of finding out the Baltic IT and Internet companies worthy of takeover or merger.

"For the last 18 months I have felt myself more an investment banker than a corporate manager," Martinson said. During that period Microlink has acquired or founded 15 companies, or more than one company per month.

"In offering professional services, in telecommunications and elsewhere, big is beautiful. Small companies are unable to make big enough investments into people and products to remain competitive on the world scene," he said.

Microlink last year carried out a stock issue for financial investors, who placed more than 100 million kroons ($6.42 million) in the company.

The company's estimates put the size of the Baltic IT market in 1999 at $400 million-$500 million . Manufacture and sale of computers accounted for about 100 million dollars, IT services for 100-150 million dollars, retail of computer accessories for 100-150 million dollars, while software production gave 50-70 million dollars.