Here is a copy of the article on Henley I told you about. It was taken from January's issue of "New Stock."
TO TAME THE DIGITAL FRONTIER
A very strong growing sector in the computer software business right now is digital asset management. Do you know what digital asset management is? You probably do, but you never knew it by that anme.
Digital asset management is the organization of information in a computer network for ease of input and retrieval. Organizing information for any large business can become problematic and therefore expensive. The formidable task of coordinating computer generated data often demands an inappropiate amount of resources.
We cast about for software companies that are involved in solving this problem, or if you will, taking advantage of this opportunity, and found The Henley Group (Symbol: HNLY) preeminent in that unique market sector.
HISTORY
Actually The Henley Group (Symbol:HNLY) represents a corporate holding company. It is the parts of The Henley Group that are the players in the field. The way The Henley Group itself works these parts together into a cohesive corporate juggernaut is not without interest.
Do you remember Advent Technologies? Well. in late 1997 Advent acquired New Reach Communications, and then adopted its name. The new NewReach, complete with a new Board of Directors, assumed a new persona as The Henley Group. And then the company went shopping.
Within weeks The Henley Group acquired, in cash and shares purchase, Magra Computer Technologies, a Toronto and Miami based company. Soon after, The Henley Group acquired MC Technologies, based in the U.K. This is a good start of a well thought out plan. The company is aggressively seeking other acquisitions in the near future.
The companies that Henley acquired, Magra Computer Technologies and MC (Media Central) Technologies are run seperately, with different clientele. They do share the similarity that both serve the digital asset management constituency through their software programs. Also, both are particularly well adapted to the publishing and graphics industries.
The Magra software program, for example, is used to track data, archive data, track production costs and generate reports, transport messages from computer to printing press, search existing files and provide system flexibility.
The customers and potential customers for this service include most graphics and Fortune 1000 companies. In regaining control of their digital data, businesses have found substantial savings as data does not have to be recreated from scratch. The market potential is suprisingly broad. In North America, the company has identified and will target, the following significant quantity of customers:
_Adverstising Agencies 1,125
_Marketing Services 600
_Periodical Publishers 4,950
_Catalogs 2,300
_Daily Newspapers 900
_Weekly Newspaper 1,050
_Journal Publishers 800
_Pre-Press Shops 2,855
_Commercial Printers 3,800
_Corporate In-Plant 22,000
Based on this research, the company estimates the potential market for a digital asset management solution in the graphics industry at over $300 million.
MC Technologies features "Digital Media Software" Package, which comes in two forms:
1) UNIX Operating System for Complex System Configurations within the publishing industry requiring highly customized applications.
2) Microsoft Windows NT Operating System that is shrink wrapped and designed for mass market appeal.
Target markets are commercial printers and advertising agencies. To truly see the potential, for The Henley Group it is important to understand the need for an advertising agency newspaper, or catalog publisher to archive photos. The process then takes the next step which is to retrieve the photos and apply them directly into the printing phase. The same applies for documentation or data bases which are used for market research. Information is filling our computers at a rate that is escalating daily. This leads to the problem of sorting better and more effeciently, or compensating when a hard drive's capacity becomes overloaded every six months. The Henley Group solves the problem economically. Through their group of companies, they clean up the problem, organize their clients archives and make full use out of the client's existing space.
Competition to The Henley Group companies are mostly from Archetype, Cascade, Media Way and Data Direct. Archetype features only limited work flow management. Cascade is not offered in Windows NT at this time, and the work flow management and asset management functions are not tightly intergrated. Media Way does not have work flow management features. Only Data Direct is a competitor with a similarly flexible system of digital asset and work flow management features.
Another target area for MC Technologies, the entertainment industry, finds only Bulldog and SGI as major competitors, with Bulldog concentrating only on post-production in the industry.
Henley anticipates growth revenue for 1997 will reach $2.5 million, $9.4 million for 1998, $18.2 million for 1999, and $33.5 million for the year 2000. The company intends to complement its holdings with other digital asset software companies in early 1998 and the forseeable future. Considering the upward trend of the publishing industry and the need for software management of this unique kind, we look for the Henley Group of companies to prosper and grow in importance.
COMPANY INFORMATION
Outstanding shares: 8,008,000
Float: 2,800,000 |
