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Kalamazoo ties up sale with UCS

Kalamazoo, the Birmingham-based dealer management system supplier, has been acquired by an American DMS group following shareholder backing at two meetings this month.

Universal Computer Systems (UCS) has paid £14.1m and a shareholder meeting was this week expected to approve changing the name to KCG 2001 plc.

Financial problems started after Kalamazoo investment in the DMS side of its operations failed, accruing debts of around £5m.

Despite reducing operating losses by a quarter to under £1.5m, the company urgently needed finance for its pension holders.

Shortly after the second meeting with shareholders, Kalamazoo chief operating officer Fred Wright said: "A deal has essentially been struck. We have spoken to several of our key customers about the changes and received a positive reaction."

The deal enables UCS (America's third largest DMS market) to expand in Europe to compensate for a sales slowdown in its domestic market.

Mike Farley, Kalamazoo marketing and business development director, said there would be no significant restructuring by UCS. Product plans for this year were unlikely to unchange.

"We expect UCS to develop and invest in our strategy," said Mr Farley. "We can't speculate how much that investment will be, but it is likely to give the company a big boost."

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