Commander buys Centari for $16m

Commander buys Centari for $16m

ASX-listed IT services company Commander has announced it will acquire leading Hewlett Packard reseller Centari Systems for an initial payment of $16 million.

Commander, originally a supplier of telephony equipment, will now triple the size of its data business and the combined entity aims to become a major force in the provision of both voice and data products and services. "Our ultimate vision is convergence," said Commander deputy managing director Dean Gingell. "We will now be able to fulfill the customer's entire communications needs."

Late last night the two parties finalised the acquisition, with an initial cash payment of $16 million to the privately owned reseller, plus a $4 million bonus after 12 months pending Centari meets certain performance targets. The acquisition has been funded through Commander's operational cash-flow and $45 million line of credit with financial institutions.

In the short-term, the Centari brand will be retained. "We have two great brands," said Commander deputy managing director Dean Gingell. "We'll continue with both for now and over time they are likely to come together."

Commander's own data business, which is about one third the size of Centari's, will be merged with the Centari business. All Centari Group staff are being kept on board the new business and Gingell expects the company to hire, rather than fire, in the near future.

The acquisition is expected to be complete by next Wednesday. Commander has informed the ASX that it expects Centari to deliver revenues of $90 million from its first year and be earnings per share positive immediately.

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