Agilysys buys Eatec Corporation for $23 million

By John Johnston
Managing Editor

Boca Raton based Agilysys, Inc has acquired Eatec Corporation, a California based provider of inventory and procurement software for the hospitality and foodservice industries.

The purchase price of $23.2 million, net of cash, will be funded with cash on hand, according to Arthur Rhein, chairman, president and chief executive officer of Agilysys.   Eatec has revenues of approximately $8 million and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) margins in excess of 20 percent. EBITDA is an approximate measure of a company's operating cash flow.

“This acquisition further enhances our position as a leading inventory and procurement solution provider to the hospitality and foodservice markets,” said Arthur Rhein, chairman, president and chief executive officer of Agilysys.  “Similar to our previous acquisitions of Visual One Systems and InfoGenesis, the Eatec acquisition complements and expands our offerings, allowing us to better serve our customers.”

In addition to being a stand-alone software application, EatecNetX will be interfaced with Agilysys’ point-of-sale offerings to create a complete end-to-end solution for customers in the foodservice industry, Rhein said.

Eatec was founded in 1985 by a group of foodservice professionals who recognized a need for a new kind of management technology.  The firm’s premise was that managers need "real-time" information on profitability in order to remain competitive. With a focus on operations, Eatec introduced its original DOS-based systems for the development and costing of recipes, for menu mix analysis and for inventory valuation and control.

Eatec later expanded its operational features to now include catering, concessions, manufacturing and retail operations as well as completely integrated accounts payable and accounts receivable modules. In addition, Eatec offers interfaces to other systems, including point-of-sale and third party accounting packages.

Rhein said the Eatec acquisition will work well with Agilysys hospitality solution offerings, including property management, inventory procurement, point-of-sale, golf management, club management, condo accounting, spa, sales and catering, dining reservations, business analytics and document management.

In separate Agilysys news, on Feb. 1 the company reported a third quarter earnings decline of 90 percent, attributed to lower sales and higher expenses. Since then, the firm made the Eatec purchase, and has repurchased 2.3 million shares for $33.5 million.