Listed IT conglomerate Iocom announced to the Australian Stock Exchange today a proposal to acquire local OEM PC manufacturer and services company Optima for an undisclosed sum.
"Under the proposed acquisition, Iocom Solutions will not only remain a core business but will be grown and strengthened," a statement to the ASX said. "The board of Iocom realise the tremendous synergy between the two companies, and importantly do not believe that this represents an inherent change in business direction for Iocom."
Cornel Ung, Optima's managing director, said the deal has been in the pipeline for "about nine months" and that it was a good one for both Optima and Iocom. He said currently Optima offers PC hardware and hardware-based services to mainly government and education customers.
The acquisition by Iocom introduces many new services it can offer to its customer base as well as many new customers to which it can offer its hardware and implementation services.
"We would like to offer more than hardware services and get our PC hardware into new markets," Ung said. "Iocom also wanted to get into new markets so there were obvious synergies.
"We always had a growth plan that included expanding services and markets. By being under he umbrella of a listed company, it makes it much easier for us to raise funding for those future growth plans."
Iocom, which was originally founded as Inside Computing in 1993, floated in November 1999 on the promise of delivering computer telephony integration solutions and outsourcing to small and medium enterprises.
In March 2000 it spent some of the funds raised during the float on the acquisition of distributor MUA and its services sister company, MUA Services and Training. The distribution arm was closed down in March this year.
Shareholder faith in Iocom diminished dramatically late last year after the company was forced to concede its acquisition of MUA and a failed outsourcing contract would run the company into the red. A restructure which included shedding its acquired software arm in February and then the MUA distribution operation in March, helped the company arrest its cash burn problems and stop its slide into oblivion.
Optima was formed in 1989 and has grown to be "Australia's number one PC vendor with revenues in excess of $74 million and pre-tax profits of $2.97 million" for FY2001, according to Iocom's ASX statement.
The ASX statement also said: "Iocom Limited have signed a share sale agreement to secure the acquisition of all issued shares in Optima Computer Technology Pty Limited. Iocom intends to issue 341,666,667 ordinary shares to purchase these Optima shares.
"The agreement for the acquisition is required to be completed within 90 days. Subject to shareholder approval of the proposal, Mr Cornel Ung and Mr Edmond Chan (Optima's IT services director) will be appointed to the Iocom board."