Hyro Limited (ASX : HYO) has today acquired 100% of Identity Solutions Laboratories Limited (‘ISL’) a New Zealand based identity management specialist, as an important expansion of the company’s offering.
Identity management services are already an integral part of Hyro’s Digital Services offering. A key challenge for organisations seeking to leverage digital services as a means to attract new customers and service existing relationships is the ability to ensure the integrity of the identity of the customers and businesses using their digital offerings. Significant advances have been made in recent years in technologies, practices and techniques to ensure that the certainty of identity of customers using digital channels is assured. Once identity is assured, initiatives such as profiled direct marketing, enhanced customer self service and data gathering can be performed with greater integrity.
“One of the keys to the successful implementation of commercial digital services strategies is the ability to ensure that the identity risks associated with dealing directly with end consumers are minimised” said Hyro Chief Operating Officer, Mr Richard Lord. “As more and more commerce shifts to digital channels, our clients need to ensure that the services they offer are increasingly personalised, implemented digital services are more effective and that the potential for identity fraud is managed.”
The acquisition of ISL is effective from 1st December 2006 with Hyro acquiring the company under a Deferred Consideration Model. Under the terms of the agreement, the vendors of ISL will receive consideration equal to 20% of NPAT for revenue directly associated with the Identity Management Practice, paid half yearly. No initial consideration will be paid to the vendors of ISL. The vendors of ISL may elect to convert their consideration to fully paid ordinary shares in Hyro at a 15% discount to 30 day VWAP. All issued capital will be escrowed for a period of three months from date of issue.
“Over the last year we have worked to bolster the management capacity and scale of the New Zealand business significantly. This has been done in light of the commercial success the company has enjoyed in that market over the last year and also in readiness for strategic acquisitions” said Hyro Chief Executive Officer, Mr Joe Calavassy. “By adding ISL to Hyro, we will achieve increased scale in growing markets, both geographically and more broadly for identity management services. We will also receive an injection of highly competent capability and management in a significant area of our overall Digital Services offering. This will also establish a Hyro presence in Wellington, which is seen as necessary in seeking additional government business in New Zealand.” “Identity management expertise will be integrated seamlessly in the total Hyro digital services offering to all our customers. ISL Managing Director, Mr Stan Levine will head the Identity Management Practice and will relocate to Australia to spearhead growth for the company within this sector.” Mr Calavassy said.
“For ISL, the opportunity to merge our ‘point-solution’ business with a quality, full service Digital Services Company like Hyro is an outstanding opportunity” said ISL Managing Director Mr Stan Levine. “This means that we will be able to position our services as part of an overall value proposition and extend the reach of our offer to the broader, and growing, community of Hyro’s clients. We are very excited about the opportunities this merger presents for our clients and for the ISL Team.”
The key metrics associated with the transaction are:
