Continuing the acquisition trail Altx -listed Xantium Technology Holdings today announced the acquisition of the business of Foster- Melliar, niche IT specialists in infrastructure management, for up to R6,1 million. The acquisition will make Xantium the only black empowered and internationally accredited company in South Africa offering specialised client training in optimising inhouse IT systems to drive measurable returns, which positions the company ideally to broaden its government client base.
"Xantium's strategy from the outset has been to bolster our services with quality niche IT companies like Foster-Melliar to maintain leadership in the market," says James Murray, Xantium's CEO. With the acquisition following on the heels of last month's acquisition of 51% of Oracle experts Waymark Consulting, Murray says that integrating the new companies into the group will be an operational imperative. As with Waymark Consulting, Foster-Melliar's key executives have entered into service contracts for at least three years and have given restraints of trade for no additional compensation.
Established in 1991, Foster-Melliar offers workshops in IT service management (ITSM) to demonstrate how to integrate IT systems with organisational processes to realise a tangible benefit for the organisation concerned. The company has trained the management of high-profile companies including Hewlett Packard, Microsoft and Tivoli, with the full client base ranging across sub-Saharan Africa, the USA, South America and the UK. Foster-Melliar is the only South African IT training organisation accredited by the UK's Information Systems Examination Board.
Murray says that Foster-Melliar is the ideal complement to Xantium's Professional Services division which concentrates on helping clients to bridge the divide between business and IT. Further, Xantium's IT Services division will offer Foster-Melliar's exclusive software that supports the workshop training, specifically for asset and systems management.
While the acquisition, like that of Waymark Consulting, will not have a noticeable impact on Xantium's annual results to year-end on 31 May 2005, "the significant positive impact of the acquisition on earnings will reflect in the 2006 financial year," says Murray.
Foster-Melliar MD David Anderson says that the company will leverage Xantium's BEE platform as well as its established client base while maintaining its core focus. "Xantium will benefit from an increase in capacity of specialist Information Technology Infrastructure Library (ITIL) consultants focussed on helping clients to derive the most efficient and cost-effective IT solutions," he points out. ITIL is a world standard in the deployment of IT processes in customer environments.
The acquisition remains subject to the due diligence of Foster-Melliar to be completed mid-May 2005 and Xantium's board approval. Xantium has been trading under cautionary since the acquisition of Waymark Consulting, and continues to do so, hinting at further acquisitions. The share closed unchanged on Friday at 49 cents.
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