Australian Internet and security service provider SecureNet is positioning itself to become the dominant player in the Asia-Pacific e-security sector, announcing its $5.7 million acquisition of Baltimore Technologies' Australian and New Zealand subsidiary, to be completed June 1.
The transaction consists of an initial cash payment of $4.2 million with the balance payable in cash contingent upon the conclusion of contractual negotiations on outstanding new contracts.
As part of the agreement, ASX-listed SecureNet will be appointed the exclusive distributor of Baltimore's products and related services in Australia and New Zealand. It will also become a Trusted World Partner for Baltimore products and services in other geographic regions in Asia-Pacific.
The primary focus of Baltimore's Australian operations is authentication and authorisation products and related professional services mainly to customers in the government and the financial services sector.
In the year ending December 31, 2001, Baltimore's Australian operations made a net loss before tax of $12.8 million and had net assets of $6.4 million. However SecureNet's managing director, Geoffrey Ross, is confident he can turn those results around.
"Baltimore Australia/New Zealand has a very strong customer and technology position in the market. By the end of FY2002, the Baltimore business will be contributing positively to SecureNet's revenue."
Ross said there would not be any significant changes made to the Australian operation, although he would not dismiss the possibility of staff cuts as a consequence of the two companies merging.
"The only change will be that the two businesses will be fully integrated by July 1. I see a big upsize as a result, Ross said. "Our businesses complement each other - Baltimore has the quality product and we have the quality customers."