Dynix announced on January 20, 1992, that it had reached agreement in principle to be acquired by Ameritech Corporation. The transaction is expected to be completed in the next few months, subject to the satisfactory completion of "due diligence," a process of investigating the accuracy of the representations the parties have made to one another. The terms and total value of the transaction will not be disclosed. Dynix will not relocate from Provo, Utah, and its management will remain in place.
Ameritech is the Chicago-based parent of the Bell companies serving Illinois, Indiana, Michigan, Ohio, and Wisconsin. Their offer is for the purchase of 100 percent of Dynix Management, Inc. (DMI), holding company for Dynix subsidiaries operating in the United States, Canada, United Kingdom, and Ireland. It will also include Dynix Scholar, products and services for school libraries, DMI's Promark, a benchmark testing company, Retro-Link Associates, a company involved in data base conversion services for libraries and Dynix Marquis, a new integrated library system for institutions needing client-server architecture and graphical user interfaces in an SQL data base environment. DMI also has agreements with distributors in a number of other countries.
Dynix has over 700 installations in 43 states and 12 countries. At least 275 of those installations were made in 1991. Total income for DMI in 1991 was $60 million, up approximately 50 percent from the prior year, and up ten-fold in just five years. The company's goal is to achieve $100 million in sales by 1994. The affiliation with Ameritech is expected to provide the financial resources to facilitate that growth. Dynix is particularly interested in establishing offices in several other foreign countries. Since it is generally believed to cost $250,000 or more to establish each office, Dynix will require a substantial amount of capital to fuel this growth.
Earlier this month Dynix and Ameritech announced a cooperative plan whereby Ameritech is offering Dynix systems to its existing LS/2000 clients.
The general reaction of librarians interviewed at ALA Midwinter was positive, but several did express concern that Dynix "not get lost in corporate Ameritech." Major companies have not had a good track record in small niche markets when decisions about development, pricing, and contractual issues have been decided at levels far removed from the customer. So far Ameritech appears to have given NOTIS, which it purchased in 1990, free reign to make such decisions.
[Contact: Julie Pitcher, Dynix, Inc., (801) 375-2770; Mike Brand, Ameritech, (312) 750-5219; Dal Harris, Ameritech Information Systems, (312) 906-4204.]