Pineapplehead has acquired Queensland-based multimedia distributor Idea Media, adding significant strength to its distribution arm.
The cash transaction involved "substantially less than a million dollars" according to Pineapplehead CEO Evan Kourambas. With Idea Media generating $2.2 million in annual sales for the last four to five years, Kourambas is confident the expense will have fast returns.
The takeover gives the IT and television graphics specialist a 200,000-strong customer list spanning Queensland and the Northern Territory, including lucrative contracts with the Queensland Education Department.
Idea Media also enjoys a strong presence in the corporate and independent retail sector in the northern states.
In addition, Pineapplehead acquires Australia-wide distribution relationships with Sony and Pioneer.
Kourambas says further opportunities for expansion are already being explored. "We'll be able to add more products and increase productivity. In turn, revenue and the bottom line should improve accordingly."
A number of possible acquisitions were investigated before deciding on Idea Media, according to Kourambas. Idea Media focuses on the distribution of video editing, video streaming and video conferencing hardware and software, which fits neatly into Pineapplehead's profitable distribution arm, Lako Vision.
Pineapplehead uses Lako Vision to fund future R&D to avoid burning through IPO funds. Last year, despite posting $6.03 million in revenue, R&D expenses saw the distribution subsidiary post an $161,885 operating loss. With the addition of Idea Media, Kourambas says this negative will be quickly rubbed out.
Besides some staff exchanges, minimal alterations will be made to the existing structure of the two companies. A name change is uncertain at this stage.
Pineapplehead harbours ambitious plans for expansion. Having opened an office and distribution centre in Auckland last month, Kourambas says a Sydney office will be operational within the next quarter.
Photograph: Pineapplehead CEO Evan Kourambas.