Newly-listed ITservices and reseller, Perth-based Alphawest, is on the acquisition trail.
The company, a key partner of Sun Microsystems, went public this week, raising about $17 million from the sale of 34.9 million 50c shares. About one million shares were traded on the first day, with the price settling at 53c, making chief executive, Garry Henley, "very happy" with the firm's liquidity.
Explaining the company's main reason for the ASX-listing, Henley said: "Our main focus is to grow the business. We are looking for tactical acquisitions. As a listed company we can raise capital for acquisition."
Late last year, Alphawest purchased Powerplus, a Queensland information management business. More recently, it took over Sun's sales to the education sector, replacing Sun's direct salesforce with Alphawest acting as reseller.
The listing also allows Alphawest to repay about $8.9 million of debt the company owes Solution 6 following a management buy-out in 2002. Overall, the company has some $15 million of finance to repay.
Alphawest currently employs 361 full-time staff, plus 64 contractors based in nine offices around Singapore and Hong Kong.
At it's peak, the company employed 650 staff, but from 2000 to 2002 it restructured, Henley said.
In 2003, the company recorded a net loss of $1.1 million, but Australian stockbroker, Patersons Securities, expects the firm to make $1 million this year, $1.7 million next year and $2.4 million in 2006.
Revenue is also expected to increase from $117 million last year to $145 million in 2004 on the back of a predicted uplift in IT spending in Australia and South-East Asia during 2004 and beyond.
Henley said his Singapore operations should rebound from the Sars epidemic, which hit the business last year.
There would be a "strengthening" of operations on the east coast, he said.
Alphawest said the planned Telstra takeover of Kaz Group should not impact on its business as it only rarely competed on outsourcing work. But Henley hoped to benefit from the IBM-Logicalis takeover.
"Sometimes acquisitions don't work," he said.
Paterson's Securities, which acted as lead manager for the Alphawest Public Offer, said that information and knowledge management, such as managing HR and financial records, would be a major source of future growth for Alphawest, and responsible for 32 per cent of company gross margins in 2004.
Alphawest also carries out IT recruitment and training.
Paterson's also notes a diverse customer base, mainly large corporates and federal and state governments.
Henley said his company had a great share register including Kerry Packer's PBL, Richard Pratt's investment vehicle, Thorney, and services group UXC, led by former Elders executive, Geoff Lord.
Shareholders included a range of good quality financial institutions, and more than 50 staff, including all senior management.