Connxion (ASX:CXN) has acquired KAZ Singapore from Telstra (ASX:TLS) for an undisclosed sum.
The acquisitions will see the company gain entry into the South-East Asian market and provide opportunities to co-operate on joint projects with Telstra. Funding for the deal will come from Connxion’s capital raising.
The datacentre allows Connxion to internally house its core data services, which are currently outsourced to IBM and other datacentres.
Head of strategy and marketing at Connxion, Catherine Reynolds, explained it will maintain existing datacentre partnerships with IBM and Global Switch in Australia.
“There’s no reason why that will change,” she said. “We’re not moving to Singapore. We need our partners in Australia to run and grow our business.”
“We want to expand our datacentre capability into Asia, because its part of our growth strategy. It’s also an expansion of our capability at an infrastructure level to host our new strategy, which is all about Web 2 customer intelligence and experience services.”
CXN will be able to reduce its datacentre costs and significantly increase margins on a number of key contracts that use these services.
Connxion’s customer count will increase to about 80. If the acquisition goes ahead, Kaz will trade under Connxion.
In a statement, Connxion managing director, Bill Brooks, said the deal strengthened two of its key verticals within data and online services.
The transaction is subject to a number of final agreements and is expected to be completed next month. It will be expected to make an immediate contribution to Connxion’s earnings from the date of completion.
This year, Reynolds said the company was also looking for another datacentre acquisition opportunity in Asia.
“At an infrastructure level we’re expanding our datacentre capability so we can expand our services,” she said. “A number of new acquisitions will come through this year that will really strengthen our customer experience and intelligence services.”