Neopost Acquires GMC Software

Other Posts
Jul 13, 2012

On July 12th 2012, French-based mailroom solutions company Neopost announced it had come to terms to acquire Swiss-based Customer Communication Management (CCM) provider GMC Software Technology. For Neopost, this acquisition marks an important step in its ambition to diversify and grow its revenues beyond support of physical mail. For GMC, the acquisition allows the company to have a bigger impact in the enterprise space, as well as to benefit from Neopost’s strong presence in the small-to-medium business (SMB) market.

With the acquisition of GMC (for approximately 2X revenue), Neopost got its hand on a jewel; one of the few remaining independent CCM providers that was desired by many, but in good Swiss tradition was “not for sale” for a long time. The company has a strong management team, good technology, a wide range of partnerships, and a large customer base–especially among high-volume service bureaus. The company is well-respected in the market for its solid execution and managed to show healthy growth in the past few years, even during the 2008-2009 recession.

René Müller, CEO of GMC Software

René Müller, CEO of GMC Software

Denis Thiery, CEO of Neopost

Denis Thiery, CEO of Neopost











With 42M CHF ($43M USD) in revenues in 2011, GMC is one of the smaller CCM leaders. We can assume that part of the acquisition rationale was the realization that outside help was needed to grow the enterprise part of its business. Most of GMC’s direct competitors have been acquired: Exstream was bought by HP in 2007, Document Sciences went to EMC, Group1 was scooped up by Pitney Bowes, StreamServe by OpenText, and the list goes on. GMC rebranded its PrintNet T product to GMC Inspire in September 2011 in a move to make the software more appealing to enterprise customers; for its ambition to play a more substantial role in this segment it is extremely helpful to have the scale, support and financial backing of a large parent company.

For Neopost, the GMC acquisition will allow them to accelerate their diversification. Similar to Pitney Bowes, Neopost needs to diversify with new offerings as their core market is under pressure.  Neopost’ sales were €1.0B ($1.2B USD) in 2011 and the share of “revenues not directly related to mail” was €80M (8% of total).  Neopost has set itself the goal to bring this to €200M by 2014, which by then is probably something between 15% and 20% of total revenues. We anticipate much of this growth will come from acquisitions as it is unlikely they can reach this number organically. It is not yet clear if Neopost will follow Pitney Bowes by acquiring business intelligence companies or forge a different strategy. Neopost acquired Satori Software in 2009, a $15M address cleansing and certification software business. Time will tell.

With GMC, Neopost gained access to very high-volume print & mail environments. The potential for Neopost to attack the existing players (Bell & Howell, Kern and Pitney Bowes) is relatively limited as Neopost does not offer high-end production-class inserter equipment and print service providers tend to disassociate hardware and software. There might be some synergies among smaller sites that can benefit from Neopost’s high-end offerings (from its PFE acquisition in 2007), but the real potential in terms of acquisition synergies may be found in the emerging SMB opportunity.

Neopost has a very strong reach in SMB businesses, especially in Europe. The vast majority of those companies produce mailings and invoices themselves, and SMB companies are faced with the same changing communication needs as enterprise customers. There is a clear need for multi-channel output, electronic invoicing, and (further down the line) digital marketing and automation solutions. Last year, GMC formed a partnership with IBM to develop cloud solutions, so we expect GMC to scale-down its solution offering and provide software that enables Neopost to actively pursue their SMB base. InfoTrends plans to explore the SMB marketing automation opportunity in Europe later this year.

Dr. René Müller, CEO of GMC, stressed that GMC will remain operating as an autonomous company under Neopost.  Dr. Müller will assume the CEO position for the next 12 months and will serve on the Neopost board for at least 18 months to ensure a smooth transition.

InfoTrends believes this acquisition creates an exciting new direction for GMC and Neopost. GMC has much more scale, which plays an important role in winning enterprise deals and provides a path down market to the SMB space. For Neopost, they have secured a strong company and taken a very important step forward in their strategy to diversify beyond physical mail. For GMC’s customers, not much is expected to change in the near term.

More blogs from

2016 InfoTrends, Inc.

WordPress Appliance - Powered by TurnKey Linux