MELBOURNE – October 6, 2004 - Destra Corporation Limited (ASX:DES) has announced the acquisition of communication services provider Techex Communications Pty Ltd (Techex). Techex predominantly provides business grade data communication services which is a complementary business offering to Destra’s existing web hosting services.
“The data communication services supplied by Techex are complementary to the hosting and domain registration services provided by Destra, allowing us to offer a one stop shop solution to our expanding client base,“ said Domenic Carosa, Destra’s CEO. “This acquisition is an important step in Destra’s broader strategy to increase its total business solutions, breadth of product offering and growth in business customer numbers.”
Techex had revenues of around $4.5 million for FY04, with normalised EBIT profit of over $700,000. The purchase consideration includes a first tranche payment of $1.5 million composed of $1.2 million in Destra shares and $300,000 cash. Subsequent payments are to be made after a 12 month earn-out period. Voluntary escrow arrangements have been agreed by Techex shareholders.
Destra is on target to generate profit for the current financial year and the Techex acquisition should bring additional profitability to the organisation. Destra recorded revenues of $9.1 million for the FY04.
The majority of Techex’s communication services is delivered to businesses and government agencies throughout Australia via its national reseller channel of 130 ISPs, system integrators and value added resellers. “Both organisations are committed to their channel partnerships and the enhanced product range and geographic coverage will add value to these strong partnerships,” added Carosa.
Synergies between Destra’s enterprise web hosting division (OzHosting.com Advanced) and Techex offer cross selling opportunities. The deal enables each company to leverage its respective product offerings to its existing customer base in order to maximise revenue growth and profitability as well as delivering cost savings from economies of scale. Operational cost savings will result with the merger of the two offices as well as integration of some of the back office functions and sharing of bandwidth costs.
“Our union with Destra complements our market offering with best of breed hosting, server co-location and domain registration services,“ said Chris Collinge, Techex Managing Director. ”We will now be able to offer our customers a full range of services with a single point of contact and a single bill. In an increasingly complex business environment, we believe this is the future of service provision in Australia and we are confident that Destra will be right at the forefront."
“Destra will continue to explore complementary business opportunities as they arise,” concluded Carosa.
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