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Software Maker HQ Returns With Buyout

Things have come full circle for Vision Solutions Inc., a maker of data management software.

Late last month, Chicago private equity firm Thoma Cressey Equity Partners Inc. bought Vision Solutions for $63 million.

Thoma Cressey also acquired Salt Lake City’s iTera Inc. and is folding the software maker into Vision Solutions.

As part of the deal, Vision Solutions is formally moving its headquarters from Johannesburg back to Irvine, where the company got its start and maintained operations after becoming part of South Africa’s Idion Technology Holdings Ltd. in 2000.

Vision is in a niche market.

Its software runs on iSeries servers developed by IBM Corp. The software backs up data and keeps servers running even during maintenance or a disaster.

Big customers include banks such as HSBC Group and ABN AMRO Holding NV.

Vision has about 2,500 customers worldwide. ITera has about 650 in North America, including Target Corp., Comcast Cable Communica-tions Inc., the Venetian Hotel and Casino and Hormel Foods Corp.






Vision’s Irvine building: 155 workers

The combined company is set to have yearly sales of about $55 million, $40 million from Vision and the rest from iTera.

Vision employs 275 people worldwide, 155 of them in Irvine. It’s likely to add people in Irvine and Salt Lake City, according to Chief Executive Nicolaas Vlok.

The company is one of three sizable players that make backup software for the iSeries. ITera has been another, along with Oakbrook Terrace, Ill.-based Lakeview Technology Inc.

Vlok said he’s not worried about some iTera customers bolting.

“We are so integrated into their applications,” he said. “It’s such a specific market that we really have the painkiller to treat the pain.”

Consolidation was inevitable, he said.

“We see a market that is ready for consolidation,” Vlok said. “It’s also a market where Vision’s distribution and the technologies that we are gaining is a story that can be repeated.”

Vision has room to expand, according to Thoma Cressey partner Scott Crabill.

“It’s a market that’s only about 10% penetrated,” he said. “You don’t find many software markets that have that kind of legs.”

Thoma Cressey also liked Vision’s customers, Crabill said.

“We’ve come across a lot of costumers who use IBM’s iSeries platform, and we have seen how loyal and how stable the customer base is,” he said.

The investor has no near-term plans for a public offering or sale, Crabill said. It would consider more acquisitions, he said.

“We are an investor that does focus on consolidating industries, so that is somewhat our strategy,” Crabill said.

Thoma Cressey typically holds investments for five to 10 years, according to Crabill.

The buyout cuts Vision’s formal ties to South Africa.

“With a public company a long ways away from here, it’s hard to get access to U.S.-based markets,” Vlok said. “We looked for U.S.-based investors in this transaction.”

Vision was the center of a takeover battle a few years back by Canada’s DataMirror Corp. The fight spanned two years, two continents and at one point pitted Vlok against his father.

DataMirror first bid on Vision back in 2000, when Idion won out with a $63 million bid.

The buy caused tension between Vlok, then Idion’s chief executive, and his father, Marius Vlok, then an Idion director.

The elder Vlok questioned what Idion had paid for Vision and later resigned from the company’s board. His son defended the purchase.

Toronto-based DataMirror didn’t give up. It bought up shares and once held as much as 43% of Idion. After unsuccessful bids to gain control, DataMirror gave up trying to buy a majority stake and sold its shares in 2004.

DataMirror’s offers were too low, according to Nicolaas Vlok. He contends an acquisition would have benefited DataMirror more than Vision.

“There was very little of the synergy (with DataMirror) that we get through the deal with iTera,” Vlok said.

Vision is keeping its global offices, including the one in Johannesburg.

But Vlok’s days of splitting his time between Orange County and South Africa are done, he said.

“I view South Africa as a place I like to visit, but my primary residence is here,” Vlok said.

He lives with his wife and kids in Irvine.

Vlok’s relatives, including his dad, remain in South Africa.

Vlok is one of many South Africans in the area, including Paul Naude, president of Irvine-based surfwear maker Billabong USA, and Rodney Sacks and Hilton Schlosberg, who live here and run Corona’s Hansen Natural Corp.

“We have a vibrant South African community in Southern California,” Vlok said.

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