ComputerCorp and S Central pull the plug on acquisition
- 03 September, 2009 10:34
- Comments 13
The merger between ASX-listed ComputerCorp and S Central is off.
According to an ASX statement, delays in progressing the acquisition has resulted in the board’s decision to pull the plug on the deal. The deal comes just days after ComputerCorp announced a full-year loss of $1.05mand a couple of weeks after S Central founder, Peter Mavridis, stepped down as acting ComputerCorp CEO.
The company did not elaborate further on the reasons for the termination of the agreement. However, ComputerCorp has revised its non-renounceable rights issue down to $2 million, in line with capital requirements, and extended it by a further four weeks.
ComputerCorp reiterated its commitment to the acquisition of Synergy Plus and said it had already made two payments towards the purchase.
ComputerCorp chairman, Domenic Martino, said the pair had been unable to reach an agreement on terms. The company would continue to search for acquisitions to help boost its reach and was actively involved in discussions, he added.
Acting CEO, Peter Cappendell, will continue to oversee the company in the interim while ComputerCorp either looks for a full-time CEO, or makes another acquisition.
“We are clearly on the acquisitions trail – just look at Coretech, Synergy and Paragon,” Martino said. “ComputerCorp and S Central were kept separate while the deal was being pursued. The terms of the deal were difficult to reach.
“I’ve been in M&A all my life – this is par of the course. You need to get two partners to agree.”
S Central owner, Peter Mavridis, said it was unable to get the deal over the line with shareholders. He also hinted at cultural differences between the two organisations.
“At the end of the day, we delayed the transaction a couple of times because [S Central] shareholders didn’t approve it. That was still the case, so the ComputerCorp deal couldn’t proceed,” he told ARN. “With M&A, everyone knows there’s lots to fit including cultures and in the end, it didn’t work out.
“S Central is a services business and that’s our culture. Moving from a hardware to services mentality is not easy to do for any organisation.”
Mavridis said S Central had grown organically by 33 per cent year-on-year and insisted it was in a good position going forward.
“We’ll be continuing with our growth plan and look at more M&A activity,” he said.
S Central recently appointed industry veteran, Michael Lapman, as COO to assist running day-to-day operations while Mavridis focuses on its business strategy.
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Comments
Anonymous
Dead Deal
How can the statement "ComputerCorp and S Central were kept separate while the deal was being pursued" be reconciled with the fact that Peter Mavridis, the S Central CEO, was appointed CEO of Computer Corp (before being stood aside about a month later). Also that the staff of S Central moved into shared offices with Synergy Plus until the Mavridies was stood aside?
And why did S Central shareholders not approve? Could it be because they were already sitting on an asset with over $10m in net liabilities (as per the published results when the deal was first announced) and didn't want to stump up the extra millions to have a slice of a combined entity in loss?
Anonymous
Someone should just buy ComputerCorp out and stop them from messing around with the market.. All the debacle from Leading Solutions is now revisted with S Central.
Maybe it's time ComputerCorp started to wake up and stop messing the industry around with continual speculation. How much damage to their reputation is this now.. How long before we see another business go down in flames.
And as for S Central, maybe they should sort out their internal issue before trying to create a bigger mess..
Anonymous
It's all a shocking mess someone obviously told some porkies and couldn't stump up the CASH.
Hyding
Let us hope.
That this is not the next Commander debacle. This is not good for the industry, as good people leave companies when this happens, and as everyone know companies like this are based very squarely on their staff.
No staff no company, no company a lot of people out of work.
Lets hope that this is not the begining of the end for CC.
concerned reader
why was the last post deleted??
Hey I saw a post this morning from "insider looking out" was it deleted? and if so, why? CC are allowed to trade at negative profit but freedom of speech is policed?
Nadia Cameron
posting comments and deletion
Hi concerned reader
Please note that ARN reserves the right to delete any comments and posts that we deem to be defamatory, incorrect or inappropriate. In this case, the post was deleted because it claimed ComputerCorp is trading while insolvent - a claim which could potentially damage ComputerCorp's reputation with the ASX and also result in legal action. Trading while insolvent is an offence, and given ComputerCorp has not been found guilty of this, we could not in good conscience leave this post online.
regards
Nadia Cameron,
editor, ARN.
Anonymous
How many more businesses Mavridis is allowed to destroy?
CC got lucky this time that Mavridis was only a CEO for a few weeks. Each of the business Mavridis got involved with was brought to the ground and now he has a business people are leaving, 10Mill+ worth of debt and couldn’t possibly make a profit.
One of many SCentral’s unpaid supplier.
Anonymous
SCentral problems
There are an incredible amount of problems within S Central that I hope will be evident to any future acquisition or merger prospects. While it would be inappropriate to discuss these in-depth publicly, I certainly hope that those responsible are ultimately held accountable in a court of law, and that they preferably serve jail time.
For those still employed within the organisation, I can only suggest getting out before the inevitable happens. But then an exodus seems to already be happening, thankfully.
It is truly a shame when good technical people get mixed up in dodgy business. It hurts their prospects for the quality day-to-day work while still at the place, and of course it can taint their future career.
Unfortunately until justice is served, more people will get hurt, and sadly there's no conscience within the organisation to stop this.
Anonymous
woman scorned
obviousy
Anonymous
S Central Dead
Dont believe any of the below matters !!
Anonymous
id belive pretty much all of them.
Anonymous
RE SCentral problems
To state there are "an incredible amount of problems" is understating it. Mavridis has what is the exact opposite of the Midas touch.
The exodus of which you speak has been an ongoing thing. The cycle is merely continuing. S Central acquire through lies, promise changes, and end up destroying the companies they buy. There's an exodus every time.
it's a shame that smaller struggling IT companies have been destroyed by the incompetence of S Centrals upper management, and even more of a shame that the board of directors above them don't even realise how stupid they look with Mavridis continually pulling the wool over their eyes and keeping them blind to what really happens in that catastrophe of a company.
Not concerned anymore
Enough said...
Would the ARN staff who are trying to protect Peter's feelings from all the bad comments like to censor this post too?
http://www.crn.com.au/News/159574,unpaid-staff-and-creditors-left-in-s-central-shell.aspx
Mavridis' creative way with figures could only go on for so long with reported record breaking company growth year to year, yet consistent monetary loss... There must've been some issues with how they taught maths where Peter went to school...