New owners, same KMD

In December 2008 we saw what we had been building up to for a long time. KMD acquired new owners in the form of the private equity funds EQT and ATP. The company was bought as a single entity with a clear intention to continue with the same strategy and management.

The transition from a public service function to a private IT company did not happen overnight. In the last ten years KMD has been through a commercialisation, where a number of new strategies have created new markets whilst focus has been maintained on the core business in the local governments.

New markets opening up opportunities
Today the original local government market generates 70% of revenue, while the central government and private business account for 30%. This directly reflects developments in recent years, when the strategy has had two prongs: one aimed at local government business and the other at new markets. It is the success of the latter in particular that was the catalyst for the sale because for several years the proportion of KMD's revenue in the private market has been higher than the 25% that is allowed for a publicly owned company.

The supertanker that was turned
The specific timing of the sale was influenced by a number of factors. KMD had a central role to play in the local government reform, and only once the reform was complete was it appropriate to focus on a divestment. At the same time, in June 2006 the Danish Parliament had adopted Act no. 548, which stipulated that KMD should have new ownership before January 2012. It was thus with a clear focus on the sale that KMD and KL began in mid-2007 to sound out the market for competent buyers.

Development, not upheaval
EQT and ATP have bought KMD as a whole with the current business plan, the professional know-how of the employees and the same management. Not least for this reason, CEO Lars Monrad-Gylling is particularly pleased with the sale: ”KMD is continuing as we know it. The strategy is continuing. The management is continuing. So the KMD we had yesterday we will also have tomorrow. We and our new owners are agreed on the journey, and they will support us on that journey. We are even stronger with this ownership and a broad business board that will push us forward and drive the development of the business and how we create value,” he says.

Growth and security
And the objective is clear: KMD anticipates, according to Lars Monrad-Gylling, continued employee growth and growth in the bottom line. KMD’s existing customers will still be in focus in the future KMD developments. It is still the long-term customer relations that KMD is concentrating on. In respect of the local governments, this means among other things that the former owners, KL and KMD, have signed a contract ensuring the local governments delivery of the systems that only KMD can currently supply. These comprise around 20 critical expert systems which have been developed specifically for local government case-handling and which can only be purchased from KMD. Through this contract EQT and ATP are committed to providing the local governments with delivery reliability and price stability in the areas where KMD is currently the sole provider. The contract also obliges KMD to continue the development and implementation of open standards and interfaces in systems and data.