Friday, July 25, 2014
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Fast-growing EPAM buys Empathy

Bucks-based Euro software firm adds Conshy digital media ad agency

Fast-growing EPAM buys Empathy

EPAM Systems Inc., a Newtown (Bucks County) software engineering company which employs 8,000 engineers, sales and support staff in countries of the former Soviet Union, Europe and North America, says it has purchased Empathy Lab LLC, a Conshohocken digital advertising firm that counts Comcast (and its NBC Universal) and Sony among its clients.

Empathy, cofounded in 2005 by ceo Kevin Labick, also serves the American Red Cross, AIG, MetroPCS, Pep Boys, and TJMaxx, among others.

Publicly-traded EPAM hasn't said what it's paying for Empathy. UPDATE: Dobkin told me he expects the firm will add 20-30 jobs a year. Empathy currently lists 25 vacant engineering, programming, sales and support positions on its hiring list here.

“Our clients are very hungry for these types of services,” Dobkin told me. EPAM sales rose 50 percent in 2010 and again in 2011, and are up around 25 percent so far this year; total 2012 billings are expected to top $400 million, with profits above $50 million.

More than half of EPAM’s business “relates to helping our clients with transferring to new digital platforms adn to the cloud,” Dobkin added. “Clients are demanding digital strategy suppoort and user experience design and capabilities. That’s the main reason we decided to add Empathy to our portoflio of services: they have these capabilities which we can throw out ot all our cleints. And we can leverage each other’s client base.”
As part of EPAM, Empathy will hire “twenty, thirty people a year,” including designers, engineers, programmers, project managers, account managers, business analysts, Dobkin told me. EPAM employs about 350 in the U.S., about half in the Philadelphia area.
“It’s difficult to find good people all around the globe, Dobkin said. “That would be true in New York and Silicon Valley, as well as the Philadelphia area, and interenationally.”
Dobkin is a native of Belarus, a former Soviet republic between Poland and Russia; he cofounded EPAM in 1991. EPAM is 40 percent owned by Russia Partners, an investment group owned by New York-based Siguler & Guff. The Fidelity mutaul fund group of Boston and Dobkin are also major shareholders.

 

EPAM employs about 350 in the U.S., about half in the Philadelphia area.“It’s difficult to find good people all around the globe, Dobkin said. “That would be true in New York and Silicon Valley, as well as the Philadelphia area, and internationally.”

Dobkin is a native of Belarus, a former Soviet republic between Poland and Russia; he cofounded EPAM in 1991. EPAM is 40 percent owned by Russia Partners, an investment group owned by New York-based Siguler & Guff. The Fidelity mutual fund group of Boston and Dobkin are also major shareholders.

He said that Empathy "matches our investment criteria for strategic fit, accretion and manageable execution risk," and that more deals may be in the works. EPAM has cash to invest: the company earned around $52 million on sales of $403 million in the first three quarters of 2012, after sales rose around 50% in both 2011 and 2010, and about half that rate on an annualized basis so far this year.

In the same statement, Labick said Empathy looks forward to selling its digital ad services, now with EPAM's backing, to big corporate clients worldwide.

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

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