January 1, 2019

NEC acquires Danish IT giant KMD for USD 1.2 billion

The acquisition aims to expand NEC’s market share in the public sector which has been KMD’s mainstay for more than 40 odd years.

Japan-based internet and broadband provider NEC have acquired Danish IT giant KMD for USD 1.2 billion. With this acquisition, NEC seek to expand their share in the public sector globally by adding govt. agencies into their list of clients in the midst of a growing demand for digital services.

According to NEC, govt. enterprises require sophisticated products and services that can help them run mission-critical workloads and protectsensitive data. They say that SaaS providers such as KMD have understood the need for such products and services in the market and are tapping various segments globally to gain market share.

By acquiring KMD, NEC believe that they will be able to penetrate the global public sector market that requires digital tools and services to manage day-to-day workloads. They say that with KMD’s expertise in SaaS products as well as their reach across local and central governments, will allow NEC to easily scale across European markets.

Takashi Niino, President and CEO at NEC claims that this acquisition will allow them to acquire a business model that leverages platforms in the digital government domain. He further stated that Denmark and the U.K. are considered as the role models to implement unified government measures and improve admin services and reduce costs.

In closing, neither of the two companies disclosed the financials of the deal but stated that the deal will be sealed by Feb end 2019. It will be interesting to see how NEC take this forward, following NTT’s partnership with VMware.