itX has acquired local Web hosting company, ICO International, for an undisclosed sum. The ASX-listed distributor's managing director, Laurie Sellers, said ICO would sit within its services arm, NeXos. The acquisition is being funded from existing cash reserves.
"We are trying to find revenue streams which are non-competing with our distribution business," he said. "ICO isn't product sales as such, but through this we can develop new opportunities."
Over the last couple of years, itX has been aggressively pursuing acquisitions with a strong focus on distribution. Sellers said it had found the search difficult.
"There weren't many distribution opportunities that came up," he said. "We will continue to look for them and buy where it makes sense for shareholders. But, frankly, not too many are available. We have had to look for something healthy which didn't conflict with our distribution business but gave us the means to diversify and grow."
ICO International provides hosting services to more than 150 customers and is a certified Microsoft gold partner. It maintains a purpose-built, 700sqm datacentre in North Ryde.
Sellers said it would continue to run the company as a standalone business in the short term and retain its six staff.
"ICO is a successful company but business was exploding faster than the management could cope with," he said. "They needed the bandwidth and resources to manage that and felt it was better to be acquired. We will be in a much stronger position to offer technical advice and guidance on those products we sell that may be on a Microsoft platform. Hopefully, existing ICO customers may be interested in other things we can offer, such as remote managed services."
Services currently account for less than 10 per cent of itX revenues. Although the latest deal wouldn't have much of an impact on this figure, Seller said it would bring fresh opportunities.