Vectra Corporation has acquired DeMorgan Information Security in a bid to expand into the NSW market. The company had been placed under voluntary administration.
The purchase will see the South Australian-based services company gain additional geographic coverage as well as new expertise in information security, managing director, Chris Smerdon, said.
DeMorgan boss, Michael Ryan, will take on the new role as corporate development director, he said. He will be responsible for running the company's eastern seaboard operations and identifying future acquisition opportunities. The DeMorgan name will be phased out over the next three months.
Smerdon said the acquisition represents the culmination of five years' work to transition Vectra from a systems integrator with a small services capacity to an information security, enterprise solutions and managed services specialist.
"Locally we have always struggled to operate just in SA as it is a limited market," he said. "The biggest area of opportunity, especially for information security, is clearly the eastern states."
As a result of the acquisition, he estimated that information security revenues would shortly reach 55 per cent of all Vectra's services revenues in the next 12 months. Annuity-based revenues would also increase to around 50 per cent services revenue.
But while the NSW market would provide greater opportunities for Vectra, it would also bring added competition, Smerdon conceded.
"It would be a tough call if you were trying to break in with just general integration," he said. "But we are taking a long-term view."
While the company had been experiencing strong growth at home, the Singapore market had also proved a strong one for Vectra, Smerdon said.
"We are having success with application security and network design," he said. "We have appointed four new staff there and expect 60 per cent growth this year."
Smerdon would not rule out further acquisitions in the information security area, but said organic expansion would be more likely.
"Our next move will be into the Canberra market as larger organisations and government departments appreciate information security issues," he said. "Our offering is more attractive to them."