S Central takes the acquisition challenge

S Central takes the acquisition challenge

S Central is on the acquisition trail, announcing plans to spend $20 million on building its IT services capacity to compete against the likes of Dimension Data and the Volante Group.

The company's managing director, Peter Mavridis, said it aimed to be listed on the stock exchange within two years.

"If we can do a deal with a business that is already listed, we would do that, but we are also comfortable doing the public offering ourselves," he said.

S Central had set its sights on boosting revenue to between $70 million and $100 million annually, Mavridis said.

The decision to merge with other companies was in line with a trend across the integration and services industry to get big or get out, Mavridis said.

"There's a lot of consolidation in the industry," he said. "It's one of those things where everyone has to get bigger, otherwise you lose out. We won't survive if we stay in the mid-tier.

"We decided to grow both organically and through acquisition and have set aside money for good deals."

One of the key factors in its acquisition strategy would be to extend the company out of its Victorian locality.

"We need geographic spread," he said. "NSW and Queensland are the next two states in line."

The company is now in talks with a NSW-based services company with the aim of closing the deal by June. Mavridis said this would see S Central double in size both in terms of revenue and customer base. Another merger deal in Victoria is expected to be completed by March.

Mavridis said the company was also focusing on increasing its hardware and technical services capabilities.

He pointed to the acquisition of the Com Connexion business in February last year as the first step in these plans.

Outsourcing businesses was another area of potential growth, Mavridis said.

Alongside the hunt for merger candidates, S Central was also working on developing each of its service offerings. At present, the group's primary businesses are hardware and technical services, and hosting.

S Central had experienced particular growth across both its hosting and recently launched professional services businesses, he said.

"We're at 10 per cent capacity at our data centre infrastructure-wise," Mavridis said. "We now need clients."

Currently, S Central has about 2000 hosting customers using its Melbourne-based data centre. These include the ANZ Banking Group, Coles Myer and Deloitte.

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