Brokat attempts to bounce back after rocky period

Just 18 months after acquiring a string of vendors, Brokat has shed its US assets. Where now for the company that was voted one of Europe's 'hottest' technology companies by Time Magazine.

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By  Greg Wilson Published  September 23, 2001

A quick look at the history of Brokat Technologies reads like the archetypal rags to riches and then back to rags — almost — story of the dot-com era.

In reality, the e-banking middleware vendor is back pretty much where it started after a roller coaster ride of investment and divestment over the last 18 months.

The vendor’s stock value tailspin began in April of this year — only a month after unveiling new corporate branding and product strategy. Within the space of the last six weeks, Brokat has completed its final round of divestment from its ‘recession ravaged’ US interests.

“When we were completing our acquisitions in the US, there was still a steep growth curve… this rapidly went downhill as demand slackened off in the US,” says Nigel Spear, country manager, Middle East & Africa, Brokat Technologies.

“This was largely a US problem, and so the decision was taken to divest from certain areas of the business, including the mobile and applications platforms. These were largely US interests,” he adds.

Post-US divestments, Brokat’s product portfolio again focuses around its infrastructure platform — Twister — and its financial applications. However, says Spear, the vendor is on much firmer financial ground and is well positioned for growth.

“We’re no longer in debt. If anything we are in a stronger financial position than we were before,” comments Spear. “We’re a debt free organisation with substantial cash reserves from the selling off of our various business units.”

But Spear admits, “we did sell the business units off for less than we purchased them.”

For the most part, Brokat’s international financial turmoil hasn’t reached the Middle East, where the vendor has been mostly known for its Twister middleware platform. According to Spear, despite the reduction in headcount, there will be no reduction in ability to service either the region’s existing customer base or any potential new business.

“The headcount changes have taken place in other areas of the business, and haven’t affected our ability to deliver solutions directly. If anything we are in a better position to deliver support, due to our strong financial footing,” he says.

However, as with many other organisations, which manage to survive the initial side-affects of a stock nosedive, Brokat is now faced with the challenge of rebuilding customer confidence.

The vendor’s early moves to address its stock situation and “realign to the changing market place,” has gone some way to restoring confidence, says Spear. Also he pledges, “not a single customer has been disadvantaged by these changes… no customer has had their supply turned off.”

With Brokat’s financial situation stabilised, the middleware provider is now positioning itself for regional growth and is currently. building up the permanent local team.

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