Logicalis, Datatec Group`s IT integration company, today announced two new business acquisitions that will significantly enhance the company`s position as a strategic IBM partner in the UK and the US markets.
They are Notability Solutions Limited, one of IBM`s top business partners in the UK, and Eisco, a leading IBM solutions provider based in the US.
Notability was acquired for lb11.4 million, lb1 million of which will be paid to the vendors in cash on the achievement of an earnings before interest and tax (EBIT) of lb2.1 million for its financial year to 31 December 2005.
The balance of the purchase price will be paid for mostly with existing cash and a small portion in Datatec shares to lock management in for a period of time. The acquisition has been approved by the South African Reserve Bank and is effective from 1 March 2005.
The Notability acquisition, which will be housed in Logicalis UK`s operations, will strengthen and add scale to the business there, increasing annual revenue from lb52 million to more than lb82 million. Notability will be renamed Logicalis Computing Solutions and will provide the platform for growing similar business streams.
Notability has strong eServer, storage and e-business skills and has developed a business solutions approach to customer engagement. This approach is closely aligned with Logicalis Group`s focus which drives a business solutions approach to IT integration.
Coinciding with the Notability acquisition, Logicalis will combine its UK network integration businesses, which includes Satelcom, into a single new company to be known as Logicalis Network Solutions.
Logicalis Group CEO Jens Montanana says: "Notability is a Premier IBM hardware and software partner serving a broad range of customers across a number of industries, including the financial services and distribution sectors."
"Our acquisition will significantly strengthen Logicalis` UK operations and will enable us to take a big step forward in building a business that offers not only networking but also enterprise computing and storage solutions."
He says this approach mirrors the successful go-to-market model adopted by Logicalis in the US to grow market share and improve the group`s competitiveness.
Logicalis UK CEO Ian Cook says the acquisition of Notability supports the company`s strategy to become a dominant supplier in its sector - delivering secure, converged computing and communications infrastructure and services for ambitious and innovative organisations.
"It enables Logicalis to differentiate itself from its European competitors as a company with a thorough understanding of the increasingly complex end-to-end information flows within an organisation, and with the ability to design, install and manage systems in the enterprise server arena."
The acquisition of Eisco, a $20 million-a-year IBM solutions provider that focuses on high-end IBM zSeries mainframe solutions, will bolster Logicalis` presence in the US. While final terms have been agreed, the acquisition is subject to contract. The transaction has received Reserve Bank approval and is likely to be effective from mid-March 2005.
Mike Cox, CEO of US-based Logicalis Inc, says the Eisco acquisition will entrench the company`s position as a leading integrator of end-to-end enterprise solutions.
"It will fill out our IBM solutions portfolio and will enable us to meet our customers` entire IBM requirements," he says.
He confirmed, however, that Logicalis Inc would remain committed to representing the full complement of HP enterprise server and storage products.
This announcement comes seven months after US-based Logicalis acquired top ranked IBM Business Partner, Solution Technology, Inc. (STI).
Montanana expects both acquisitions to contribute positively to Datatec`s earnings in the current financial year.
He adds that the Logicalis Group will continue to look for strategic acquisitions of solution providers with complementary vendor lines, resources and capabilities that strengthen the group`s product and service offerings.
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