More than 150,000 tech and IT workers have been laid off in the U.S. since the start of 2023 as declining demand for digital goods and services as the pandemic eases forced tech giants to change strategy. This wave of layoffs is an unfamiliar sight in Greece, where increased activity in digital projects is fueling a steady annual demand for 7,000 IT engineers, and a supply that matches school and university graduates is limited to 4,000 specialists. This is an unprecedented mobility that has taken place in recent years in the IT sector and is based on the great need of Greece for digital modernization projects both in business and in the state. It is no coincidence that at least five takeovers of companies have taken place since the beginning of the year; one per month, and the “dance” of transactions lasts for the last 2.5-3 years. These acquisitions, although their total cost is just over 7 million euros and the lion’s share of them in the scheme, reveal the processes taking place in a market whose best days are yet to come. However, in addition to mergers and acquisitions, a large number of IT projects have been contracted in recent months, which significantly increases the backlog of companies.

In particular, from the beginning of the year until the end of May, Epsilon Net began acquiring a 60% stake in each of Diginet and Netera. The first, with founders Athanasios and Chrysostomos Papageorgiou continuing to manage it, specializes in the development, distribution and technical support of modern tax and cash systems (e.g. retail scales, receipt printers, etc.) showed turnover and profit before payment in 2022 taxes of 2.10 million euros and 210,000 euros, while Epsilon Net will pay an amount of 1.6 million euros for 60% of Diginet, and the payment of additional compensation (income) is provided for two shareholders who share 40% equally, as as long as the company meets specific performance indicators during the year. As for Netera, 60% of which was acquired by Epsilon Net for €700,000, it has developed a hotel management program (bookings, financial data, statistics export, etc.) used by more than 800 properties. Last year, sales were 241,000 euros and net profit was over 180,000 euros.

In recent months, a large number of IT projects have been contracted, which significantly increases the backlog of companies.

Epsilon Net’s third acquisition this year concerns 80% of Milestone Informatics for €1.36 million. The deal provides for the payment, based on financial performance for 2023 and 2024, of additional compensation in the amount of 240,000 euros to sellers Theodoros and Dimitris Argyriadis, who retain 20%, as well as their management role. Milestone Informatics develops custom software for businesses with a turnover of 1.40 million euros and a pre-tax profit of 216,000 euros. Epsilon Net also signed a binding agreement with the National Bank to acquire 7.5% of the entire authorized capital of the IT company from the latter at a price of 7.4 euros per share. The two parties signed a memorandum of cooperation in November 2022, with NBG having the option to acquire an additional 7.5% stake three years after the completion of the original deal.

Also early last month, Entersoft signed a private agreement to acquire 62% for €390,000 of SmartCV, a company that has developed software to digitize recruitment and HR processes. In 2022, SmartCV’s revenue exceeded €100,000 and it is estimated that this amount will more than double this year.

For its part, the Quest group acquired 100% of Epafos, which has business software and an integrated information system for education, for 2.47 million euros. And this particular transaction is accompanied by the payment of additional remuneration to the old shareholder over the next two years, subject to the achievement of specific results. Quest Group estimates that this investment will increase consolidated revenue by 5 million euros per year, and the return on operating income (Ebitda) will be about 10%.

Demand for specialized staff is on the rise

The IT ferment is expected to continue in the coming years. And this, as Giorgos Doukidis, professor of e-business in the Department of Administrative Sciences and Technology at the School of Management of the University of Economics of Athens, explains to “K”, among other things, due to the giant enterprise for the digital modernization of the country with projects of the order of 3 billion euros, to have temporary and permanent contractors or be in an advanced competitive stage. This trend is evidenced by the fact that annually the number of IT engineering graduates does not exceed 4000 people, and the number of vacancies is 7000 people. However, in addition to major digital transformation projects in the private and public sectors, demand also comes from companies with physical networks whose digital modernization is underway, as well as from banking institutions, which in many cases are “acquiring specialized technology companies to develop new digital products. The professor at the University of Economics also believes that much of the demand will come from training and retraining projects funded by the Recovery Fund, and this backdrop includes deals such as the purchase of 85%-90% of IEK Akmi. fund BC Partners.

And maybe in the US, the IT sector is undergoing a complete restructuring, and in Greece – at least over the next three or four years – the implementation of a significant number of digital projects will be in full swing. These include the €884 million Ultra Fast Broadband Access (UFBB) infrastructures that the OTE group and the TERNA Energy and Grid Telecom consortium have taken on the development. The telecoms provider, which took over three of the seven parts of the project, is expected to be asked to sign a related contract in the near future. For the remaining four sections of UFBB, the TERNA Energy – Grid Telecom joint scheme is subject to the approval of the Accounts Chamber, proceeding with the creation of TERNA Fiber, a special purpose company to implement the project in geographic zones 2, 4, 5 and 6.

The list of projects that have been awarded to contractors includes nationwide expansion of the national telemedicine network designated by the department (OTE, Vodafone – Cosmos Business Systems, Nova, Space Hellas), development – expansion of telecommunications. the infrastructure of the Ministry of Foreign Affairs (Space Hellas – Nova); and the digitization of the records of the National Health System, which is being implemented in the form of a framework agreement attached to eight schemes.

The contractors of the specific project, which involves the digitization and electronic management of archival records of patients in medical institutions, include, in addition to IT and telecommunications companies, construction companies such as Intrakat, which is expanding its scope of activities to digital projects, and the Mytilineos group.

The projects of which concern the creation of appropriate applications to support remote work in the state (Vodafone – Byte Computer), the digitization of the diplomatic and historical archive of the Ministry of Foreign Affairs (Cosmote – Q&R) and the modernization of the integrated information system of the Legal Council of States, as well as the modernization of digital services developed by Unisystems Group Quest.