The rapidly expanding Asian IT market will be the ultimate prize for Com Tech, if its parent company, Dimension Data Holdings, successfully takes over leading communications specialist Datacraft Australia.
Immediately prior to DDH's voluntary bid for the publicly listed Datacraft, the latter sought suspension of its shares on the Australian Stock Exchange. At that time they were being traded around the $2.70 mark.
DDH is bidding $3 a share, with the majority of outstanding shares believed to be in the hands of interests associated with Datacraft's founder and chairman, George Kepper.
Datacraft Australia has an indirect interest in 55 per cent of Datacraft Asia.
Following the Australian bid, the Securities Industry Council in Singapore ruled that Dimension Data is required to make an unconditional offer for all the shares of Datacraft Asia upon the Australian offer becoming uncondi- tional. That point is reached when Datacraft shareholders, representing 90 per cent of the issued share capital of Datacraft Australia, accept the DDH offer.
The net effect will be to give DDH and its major vehicle, Com Tech a direct presence in the Asian market where Datacraft has been highly successful. So successful that last year datacraft Asia's revenues jumped 65 per cent to $US143.3 million, and earnings before interest and tax leapt 73 per cent to $US14.5 million.
Datacraft Asia has 16 offices in the region and has recently won major contracts including a global communications network for China's largest shipping company and a large ATM switch for Telecom India.
If the Australian bid is successful, Datacraft Australia and Com Tech will be merged as Dimension Data Australia, with current Com Tech non-executive chairman Bob Mansfield expected to occupy the seat of managing director - according to reliable sources.
David Shein, managing director of Com Tech, said the situation is now in the hands of Datacraft's shareholders. "We've made our bid - it's now a matter of what they want to do," said Shein. "We're in the same sort of situation where you bid for a contract - it's now out of our hands."
A report carried in ComputerWorld suggested that DDH's plans could have major ramifications for networking vendor Cisco Systems, as Com Tech and Datacraft are two of its leading resellers in Australia.
A merger between Com Tech and Datacraft would see Cisco's most valued competing partners becoming one.
"DDH is one of our strongest channel partners and Datacraft possibly our fiercest rival, said Colin Kempter, general manager international sales and marketing, Scitec Australia.