Nordics integrator Proact sold off its Spanish business because running an Iberian operation as a Swedish firm made it difficult to build critical mass, and gains were too slow.
Proact sold its Spanish business to Madrid-based MSP Cibernos on Thursday.
Its director of its West unit, Sander Dekker, told CPI that Proact decided to sell up because it didn't see the growth it was hoping for with the amount of effort it was putting into its Spanish arm.
"We are a services organisation, and to sell a 24/7 service in a local language, backed up with a large environment, you need a critical mass of people at a local organisational level," he said.
"It is quite complex to do that with a small business. It takes a lot of time and a lot of effort to grow. And then organically you will grow very small. With the same efforts, when you put that into a larger market where you have that critical mass already, you have much more impact."
He added that the firm doesn't have any plans to sell off other minor subsidiaries.
"It was difficult for us as a Swedish, north-western European organisation. I say that it's always a bit complex for a beer drinking culture to manage wine drinking countries," he said.
"It's always emotional because I have been with them for nine years and have a close relationship with the management team… I think this is a positive decision for them."
Dekker said Proact's Spanish subsidiary was logging revenues of under €10m with a headcount in the country of 15.
It acquired the business when it paid €14m in 2011 to buy Databasement, an MSP that had revenues of around €2m and a headcount of eight.
The strategy for Proact is to double down on investing in its largest markets.
Dekker managed four countries before the sale - Spain, the Netherlands, Belgium and Germany - but he now only manages the Benelux region.
Oliver Kuegow is now running Proact's German business. Kuegow formerly co-founded German IT services firm Teamix, which was acquired by Proact in 2017. He stayed on as a director of Proact Germany following the acquisition.
Proact will turn its attention to growing its managed services business in the German market, Dekker said.
"If you look at Germany, our market there is seven times bigger than the Netherlands. Our market share of managed services in Germany is relatively low against the market potential. Whereas in the Netherlands and other core markets we have a significant share," he said.
"We have a lot of ambition, that's for sure. We see that there's a market shift and a huge need for specifically our managed services proposition that focuses on datacentre in a hybrid environment."
Dekker also hinted that an acquisition in Germany or the Netherlands is being discussed.
"We want to put all efforts into Germany and the Netherlands to reach and to use momentum via a buy-and-build strategy.
"Currently, we focus on managed services organically, and we are trying to find the right targets where we have the ideal cultural strategy match to grow our business further in the near future."
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