ASX-listed Midware has announced that it will acquire IT network services company SynergyIT in a small cash and stock deal.
Midware, a provider of software and services to the legal and Government verticals, paid $300,000 in shares, $27,000 in cash, and agreed to pay off $373,000 of SynergyIT’s debts.
These debts are owed to the former owner of the Synergy IT business, Denis Bignold and associated entities. Bignold will remain involved with the SynergyIT business under its new parent as both a director and consultant.
SynergyIT, which will operate as a separate business unit of Midware, offers a range of outsourced help desk, network management, application hosting, consulting, system design and implementation services.
The business is a partner of software vendors Citrix and Computer Associates, among others. It employs 12 staff and all are expected to remain employed by the new parent company, which now employs over 100 staff.
Midware chief executive officer, Mark Flack, said the longer-term plan was to migrate some of Midware’s existing customers across to SynergyIT’s data centre facility in the inner-city Sydney suburb of Strawberry Hills (Redfern). “Several of our Government customers are currently being hosted elsewhere and have indicated that they would like to move across to the Redfern facility,” he said.
Midware expects that that the SynergyIT business will immediately generate positive returns with 2003/04 revenues of $1.8 million. Subsequently, Midware expects a return on investment of at least 20 per cent within 12 months.