Montreal’s Syntax bolsters North American SAP practice with acquisition of Toronto-based Illumiti

Syntax, an enterprise cloud ERP solutions provider, was primarily an Oracle specialist before a 2019 acquisition gave them a strong SAP presence in Europe and Asia, and now with the acquisition of Illumiti, whose business is mainly in the U.S. and Canada, they make a similar upgrade to their North American capabilities.

Christian Primeau, Global CEO of Syntax

One major Canadian-based SAP partner has acquired another. Montreal-based Syntax, a portfolio company of Montreal private equity firm Novocap, has purchased Toronto-based integration and management consultancy Illumiti, whose substantial practice is focused around SAP. The move greatly strengthens Illumiti’s SAP resources in Canada and the U.S., and increases the depth of solutions they can offer customers. It also adds new practice areas around SAP Business ByDesign, and SAP SuccessFactors. Illumiti will operate as an autonomous Syntax company. Terms of the deal were not disclosed.

“Syntax specializes in mission-critical application management in the cloud, and our major focus is around Oracle and SAP,” said Christian Primeau, Global CEO of Syntax. “We are a full stack managed services company that has a very strong professional services capability. Our journey has been focused on helping customers on key mission-critical services, enabling them to truly go through digital transformation, and this acquisition dovetails extremely well into that strategy.”

While Syntax’s SAP practice is strong, it has been heavily weighted outside North America because the core of that practice came from the 2019 acquisition of  German-based Freudenberg IT, which has a strong presence across Europe and in Asia, and a more limited one in North America. The SAP practice was further bolstered by the acquisition earlier this year of Linke, which has a strong AWS practice, but a focus on specific European markets.

“Before our acquisition of Freudenberg, we were primarily servicing the Oracle market,” Primeau said. “Illumiti lets us replicate the business model that we have in Europe, and in Asia, especially in China. We missed this deep functionality in North America. Illumiti brings us this deep industry expertise, so we are very complementary with them, and very aligned.”

Primeau said that about 40% of Illumiti’s business is in Canada, about 50% in the U.S., and the rest in Switzerland, with the latter also dovetailing nicely with Syntax because they have a strong presence in the DACH countries, especially Germany.

“That complements Syntax’s business well,” Primeau indicated. “We had very strong growth in the last 4-5 years, both organically and through acquisition, and went from being very Canadian and US Northeast-centric to being very global.” Between 10-15% of their business is still in Canada.

Illumiti brings around 250 people to Syntax, of whom Primeau said north of 225 are involved in services delivery to some extent.

“We have about the same amount in Europe and in Asia, and now have over 500 consultants around the world,” Primeau indicated. “We are, however, still focused on being a boutique company at scale. We are not trying to be the next Accenture or Deloitte.”

Illumiti is a Platinum SAP partner, while Syntax is a Gold Partner, but they both have different strengths as SAP partners.

“Syntax has many credentials around SAP,” Primeau said. “We have two of our products in the SAP store, and llumiti doesn’t have any yet. However as an SI they are a Platinum partner, while we are a Gold integrator partner, and that’s from Europe and Asia. We will benefit from their certifications, but we were also very involved in the SAP partner community.”

Illumiti and Syntax both now have full access to each other’s resources. For Illumiti, this means access to Syntax’s S/4HANA implementation expertise, application managed services capabilities, and strength in the Industrial Internet of Things [IIoT] and digital manufacturing spaces, as well as in more traditional verticals like construction, engineering and mining. In addition to a much deeper North American presence, Syntax also gains two SAP practice areas it was not involved in at all before, Business ByDesign and SuccessFactors.

“Syntax’s strength is in the upper end of the midmarket and the enterprise, with Fortune 1000 customers who want to deal with a different type of partner, who can provide a more intimate, white glove type of experience,” Primeau indicated. “With Business ByDesign, which is more of a lower midmarket type of product, Illumity has done a great job of positioning themselves, for customers who aren’t yet S4/HANA customers but could grow into that. In mining, for example, they start with a company who has one or two sites, and for that customer, Business ByDesign is a wise choice. But as they grow into a larger company with acquisitions, and move up to S4/HANA, Illumiti will continue to be their partner of choice.”

Primeau said that the Business ByDesign practice also makes sense among some of Syntax’s traditional customer base.

“In the upper end of the midmarket and the enterprise, we have customers who have carve-outs from their company where Business ByDesign also makes sense,” he noted. “So this practice lets us help customers in the beginning of their journey, and lets us help big ones with divestiture carve-outs as well.”

The other new practice area that Illumiti brings is around SAP SuccessFactors’ human capital management [HCM] solutions, which have generated increased customer interest because of the challenges of managing home-based and hybrid workforces.

“Bringing in their SuccessFactors practice is super-exciting for us,” Primeau said. “That practice is growing extremely rapidly. We didn’t have HCM capabilities anywhere before, even in Europe or Asia. We believe this capability will help us scale not just in North America, but also in Europe and Asia.”

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