Leading Solutions keeps the name
- 10 December, 2007 12:09
ComputerCorp will be renamed Leading Solutions as part of an agreed merger between the two integration companies.
An agreement between the two companies to join forces was finalised this week. As previously reported in ARN, ASX-listed ComputerCorp will pay $500,000 in cash as well as an issue of just over 167 million shares valued at $0.17 each. It will also offer additional shares at a later date based on company performance.
ComputerCorp shareholders will vote on the deal in February and two companies are expected to start trading together from January/February. Leading Solutions founder and now managing director of the combined company, Frank Colli, said it had chosen to retain the Leading brand because it was more broadly recognised.
"It made sense that our brand should move forward as we are much better known on this side of the country than ComputerCorp," he said. "It will be easier to re-educate ComputerCorp staff than our Leading customers."
ComputerCorp's current chairman, Domenic Martino, will stay on is his position. ComputerCorp CEO, Robin Rindell, will become the combined company's CIO and CFO. The merged entity will have more than 430 staff and expects to generate more than $300 million in its first year. As part of the merger agreement, Colli will also provide $2.3 million in working capital.
The Leading/ComputerCorp merger comes as rival listed integrator, Commander, continues to be questioned by the industry over the success of its acquisition of Volante over two years ago.
Colli brushed aside concerns Leading and ComputerCorp could face similar difficulties and pointed to Leading's integration of BCA IT as proof of its ability to create a common culture.
"The litmus test is what happened with BCA IT - since we acquired that company 12 months ago we've had 24 per cent growth and retained most of their people," Colli said. "We had some people in the industry who were concerned and suggested it might not work, but who now have full confidence in us.
"ComputerCorp is strong where we are not strong, they have a customer base where we don't, and vice versa. It's easier to integrate them into our company. The issue is where you have shared customers - but really, there's minimal overlap in our databases.
"With what's happening with our competitors, customers are looking for an alternative provider."
Leading Solutions and ComputerCorp both have relationships with HP, IBM, Toshiba, Lenovo anmd Lexmark. While ComputerCorp boasts of a strong heritage in mining, federal government and large corporates, Leading's customer base includes SMBs, healthcare organisations and education.
ComputerCorp shares were trading at $0.27 at the time of going to press.