Banking and finance software developer Global Technology Australasia has taken a $1 million, or 50 per cent, stake in healthcare and government software developer Citadel Computer Systems.
The acquisition provides GTA with Citadel's multidimensional database system jBASE, which the company will integrate with its own banking application, GLOBUS.
The deal also enables Melbourne-based GTA to expand its geographic reach through Citadel's operations in New Zealand and Sydney. Citadel specialises in developing applications for the government and health markets, which the GTA will look to leverage.
"This is an exciting opportunity for GTA to expand and Citadel's jBASE skills will form an integral part of GLOBUS. Citadel's unique Web development expertise will be invaluable for the Internet banking solutions GTA already offers," GTA managing director, Robert Edge said.
"Also, Citadel has an impressive installed base of clients such as Optus, Lucent Technologies, 3D Networks and 3Com, both internationally and regionally."
Citadel boasts revenues of $2.5 million a year with profits of approximately $400,000.
"This strategic relationship with GTA provides exciting opportunities for both sides," said Citadel managing director Alister Bland. "It allows us into GTA's Asian network and to expand our e-business into its financial client base. On our side, we offer new opportunities in New Zealand and in the health and government sectors."
The deal allows Citadel to retain its name and corporate branding, although both Edge and sales and marketing director Johan van Jaarsveld will join the Citadel board. There is also an option for GTA to take a further 50 per cent stake within four years if management is happy with profitability, according to Edge.
The share market has reacted cautiously to the announcement, and there is little movement in the current share price of 45 cents.