SPECIAL FEATURES
Sunday, December 14, 2003
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BY JOE GARDYASZ
With a merger and a third round of seed capital financing under its belt, ANE Technology Services of Johnston has begun an aggressive expansion throughout the Midwest. As a result of the growth, the company expects to create 60 new high-tech jobs in Iowa within the next year.
The company, which specializes in outsourcing information technology services to community banks, recently merged with Prime Logic Technical Partners of Cedar Falls, a firm specializing in Web site development and hosting. The combined company, which will remain based in Johnston with a satellite office in Cedar Falls, has 25 employees.
To finance its expansion, the privately held company has raised about $750,000 in venture capital from four Iowa-based funds.
"The desire to serve community banks and expand our markets drove the expansion," said Joel Walker, ANE's president and chief executive, who estimates revenues will increase by 90 percent in the next year.
ANE discovered its merger partner through one of the investor groups it was working with for its latest round of financing, Walker said.
"[Prime Logic] saw our business plan and saw they were in the same market areas, and they contacted us to see if there was any interest in a merger - and there was," he said. The merger created a larger company in several dimensions, including sales and the range of products and services it can offer, as well as a greater market share in Iowa, he said.
The 60 new technology jobs will include positions for technicians, network engineers and security specialists.
"These are quality jobs; they'll be in the $50,000 to $80,000 salary range," Walker said. "They're the kind of jobs we need in Iowa."
The company also plans to add a dozen sales positions in 11 Midwestern states, beginning with sales offices in Wisconsin, Illinois, Kansas, Missouri and Minnesota.
ANE currently serves about 100 client banks in Iowa, primarily privately held community banks with assets ranging from $25 million to $1 billion, out of about 420 banks chartered in the state. "Because we handle so many banks right now, we'll be able to provide an expertise that local vendors don't have," said Brent Addison, ANE's vice president of sales and marketing.
The two principals of Prime Logic, Kurt Vander Weil and Mark Stewart, have been named vice presidents with ANE, and the company's four employees have joined the company.
Most banks with more than $100 million in deposits have some sort of technology department, but many smaller banks do not, said Steve Looney, vice president of technology for the Iowa Bankers Association.
"In the past, a lot of banks have relied on someone locally for network support," he said. "We were starting to see that go toward out-of-state companies because of the complexities involved with security. I think a few more local companies [including ANE and others] are starting to address the needs of the banking industry more."
In the Midwest, RSM McGladrey Inc. will probably be ANE's biggest competitor in the banking technology services market, Addison said.
Walker founded ANE five years ago with his brother-in-law, Tom Agnitsch, to target what he saw as an underserved market niche. Walker was previously information technology director for the U.S. Postal Service's Iowa region. Agnitsch, an accountant, had been in charge of operations for a small information technology company.
"We had talked about forming a company for several years before we got the guts to do it," Walker said. They pooled their retirement savings to initally fund the company, and later received assistance from Software and Information Technology of Iowa in finding an angel investor for its second round of financing.
"It's taken all of our skill sets to get this company going," Agnitsch said. "We have a nice complement of backgrounds that most companies don't have."
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