Allied and Longreach to merge

Allied and Longreach to merge

Allied Technologies has opened merger talks with local point-to-point wireless and intelligent switch vendor, Longreach Group. The two are hoping to confirm the deal by early September.

If accepted by Longreach shareholders, the merger will see Longreach hold 57 per cent of the combined entity.

Allied will offer one of its shares for every 2.5 shares held by current Longreach shareholders. The exact value of the merger was difficult to pinpoint because the 2.8 million options issued by the company were exercisable at different values, Allied chairman, Michael Addison, said.

The two businesses maintained complementary interests in the defence, intelligence and security communities, he said. He also pointed to recent Department of Defence budget increases as being a timely opportunity for the proposed entity.

Once merged, the combined business would go on the acquisition trail, notably looking for ICT businesses with a focus on defence, intelligence and security and offshore capabilities. Neither Allied or Longreach currently has an offshore presence.

The merger should bring to a close Allied's ongoing bid to find a merger partner. In January, the services integrator entered into a reverse takeover of ARA Group, which was subsequently dropped in March. The deal would have seen the building services business gain a backdoor listing on the exchange.

Allied sold its telecoms and utilities division, TUSC Computer Systems, to Ericsson in November.

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