Beleaguered integrator Skai Computer Systems has a new lease on life, snapped up by Melbourne-based company Pacific Diamond for the bargain price of $75,000.
The sale includes fiscal assets, good will, leased assets, stock and customer records, as well as Skai's intellectual property and Web site. Pacific Diamond will operate the business in tandem with its IT retail arm, Blue Ribbon.
"We have been frantically working to establish accounts and get the business moving as quickly as possible," Pacific Diamond managing director George Rossengas told ARN. "But it is a wonderful business with some wonderful accounts and a very good reputation. We are very happy with the acquisition."
With around $350,000 worth of contracts on the table, Skai is already shipping goods to customers. Pacific Diamond will retain most of the staff, with Rossengas describing their efforts to keep the company running as "fantastic".
"We have no intentions of changing the business at this stage, but we have every intention of improving it," he said. "It has been really let down over the past two years."
Pacific Diamond began selling PCs through its Blue Ribbon business, diversifying into office supplies mid-way through the nineties. Its wholesale stationary business has grown into a significant distribution business and further acquisitions have strengthened the group.
"We heard about Skai's problems about three weeks ago and we had to make some decisions because the computer market has been hard of late. So we looked at acquisitions and when we heard about Skai, we made an offer."
Administrators also received an in-house offer for the sale of Skai, which was withdrawn at the last moment.
Rossengas said Pacific Diamond's retail business would supplement Skai's operations.
"Blue Ribbon has been profitable all these years and we have a few very good accounts. The two businesses will complement each other, but Skai will be at the forefront because it is a much larger organisation."
Pacific Diamond is looking at further acquisitions in the market.
Creditors will now meet on January 31 to decide whether Skai should place the company in liquidation, return it to the directors, adjourn the meeting or enter into a Deed of Company Arrangement (DCA). Administrator Hall Chadwick is hopeful for a DCA offer which would give creditors a better return than placing the company in liquidation.
Administrators have recommended the meeting be adjourned for a maximum period of 60 days.
Hall Chadwick's report to creditors cites a narrow client base in terms of revenue and under-capitalisation as reasons for the company's failure. Furthermore, the collapse of One.Tel meant the company was forced to appoint a more costly ISP for one of its major accounts, an arrangement that ended up losing Skai around $10,500 per month on the account.