Systems integrator Data#3 has signed a heads of agreement to acquire the systems integration business of Melbourne-based Beethoven Com-puter Services.
The move comes as part of Data#3's strategy to advance its national expansion plans. In a statement relating to the announcement, Data#3 said the acquisition would lift its presence in Melbourne and consolidate its position in the east coast market.
Data#3 managing director John Grant said it currently had a small presence in Victoria, but had a national objective, as well as national clients and vendors.
"Growing our operations in Victoria from 11 people to 45 people will just give us much more capacity and much more presence on the ground. Hence, credibility with customers and suppliers."
Grant confirmed Data#3 was considering more acquisitions. "What we've got now is a business which is capable of providing applications, infrastructure and networking solutions nationally," Grant said.
"What we'll look for in terms of other acquisitions is specialty skills and they will be in areas like applications development, e-commerce, networking and security."
Grant said the company was looking at acquisitions, rather than organically growing the business, because of staff shortages in the IT industry.
Data#3's acquisition of Beethoven's systems integration business follows on the heels of its purchase of Sydney-based systems integrator CICtech-nology last year.
"That first critical acquisition has enabled us to build, with considerable effort, an operational framework from which we are now able to cost-effectively extend our national presence via the purchase and bolt on' specialist IT companies of a size similar to Beethoven," Grant said.
"Unlike the CICtechnology purchase, which has required a significant integration commitment to create common operating and financial systems, Beethoven's business will be seamlessly incorporated within our existing business model from day one and will operate under our brand name immediately."
According to Grant, services was an important part of Data#3's business, and it had been intentionally moving the business more into this arena.
"The value that customers get from businesses like ourselves is more directed, these days, towards the provision of services," Grant said.
"So we're trying to move our business to where the greatest area of perceived value is in relationship to the customer."
Grant said Beethoven's systems integration business had recently invested in a network management centre which was forecasting sales of $10 million in 2000, and had recorded growth of more than 30 per cent during the past year.
The acquisition does not include Beethoven's software development arm.
Data#3 would not disclose the acquisition price of the systems integration business of Beethoven, but revealed it would comprise a mix of cash and shares in Data#3 with the final price subject to an earn out.