Banksia's merger with Netcomm - expected to be finalised as this issue of ARN goes to press - caps an exciting year for the privately held Banksia and the end of a troubled one for NetComm.
Just a year ago Banksia acquired Simple- computing, a move which gave it broader coverage in the modem marketplace.
It followed this in August last year with the acquisition of Dataplex, which has data communications products aimed at the big end of town. It will continue to handle Microcom's products following that company's buy-out by Compaq.
In the middle was the core Banksia business - covering the premium modem market. To this, it is adding Netcomm's business.
Banksia Technology has been ranked the fifth fastest growing private company in Australia for 1997 in Business Review Weekly's (BRW) "Top 100 list". This is the third year in a row that Banksia has made the BRW Top 100, rising from 24th to 17th, and now fifth. Turnover growth between 1992 and 1996 was 1050 per cent.
Netcomm had a much rougher year. In April it hived off its modem manufacturing operations to Victorian-based electronics manufacturer Hartek for $1.1 million. The money was used to retire debt and fund further research projects. Hartek now manufactures Netcomm's products.
Netcomm posted a loss of $2.7 million for the first half of its financial year, but the sale of the manufacturing division was expected to save it $2 million a year.
At this stage, it is unclear what the new corporate entity will be named; if Banksia will gain a back door listing on the Stock Exchange or if Netcomm will be de-listed.
What is clear is that the combined Banksia/ Netcomm entity will have about half the total market for modems in Australia.
But having covered the modem market at all points, Banksia doesn't see itself staying in that space forever.
"We don't see our fut- ure as being just in the modem market," said Cam Wayland, group marketing manager for Banksia.
"Modems just connect things - we see that access technology as where we are going, especially with the Internet.
"Our future lies in extending the connectivity technology we have established through the modem business," said Wayland.
"We're not in the LAN business but we're interested in products that connect an office LAN to the Internet. That's not LAN switching but a connectivity solution."
Passing on the benefits
While Wayland could not comment on the merger with Netcomm, he did say that with the acquisition of Simplecomputing and Dataplex, Banksia is now beginning to get the economies of scale that it can pass on to the channel.
"As resellers see margins fall, it's essential for us to add value to the product - like the Simplecomputing Business Pack," said Wayland (see page 1).
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