The rehabilitation of unsuccessful Internet startup 131Shop is taking another step forward with the purchase of B2B specialist Redstar.
Redstar will join an earlier acquisition, mobile and wireless applications developer TIG International, under the banner of 131Shop, which is about to be renamed Focus Technologies.
Both deals have been masterminded by ex-Sausage king Wayne Bos' investment company, Tomorrow, which has negotiated a controlling stake in 131Shop. Tomorrow is looking to build a business that delivers supply-chain management efficiencies to asset-intensive industries, including mining, oil and gas, and engineering. Its strategy is to create a series of plug-in solutions that will integrate legacy enterprise resource planning (ERP) and online applications.
The deal will allow the two units of Focus Technologies group to share lucrative blue chip customers and adopt a more end-to-end approach in a high growth area according to Bos. "[It will] position 131Shop to take advantage of the growing need for companies to integrate the buying and selling processes of their websites into back office, customer and marketing systems," he added.
Bos says both Redstar and TIG International are profitable businesses, a level of operation that 131Shop never attained in its earlier incarnation. Revenue projections for the joint company are expected to be released in the coming months.
The integration of the two companies will occur "gently" with both Sydney-based offices continuing to operate as usual. "The priority now is maintaining the operations as they are, then we can examine synergies and match up where appropriate," says Bos.
Meanwhile, amendments were announced to the agreement between 131Shop and Tomorrow, which will give Tomorrow a 52.5 per cent stake on a fully diluted basis. In return, Tomorrow will contribute a total of $19 million if it exercises all rights to options and partly paid shares under the agreement. Shareholders are scheduled to vote on all agreements next month.Photograph: Tomorrow's Wayne Bos