Volante, Ipex merge to win government, outsourcing deals


Volante is merging with Melbourne's Ipex to create a single $480 million Australian-owned IT infrastructure and services company with 850 employees, subject to a shareholder vote in February.

Volante is merging with Melbourne's Ipex to create a single $480 million Australian-owned IT infrastructure and services company with 850 employees, subject to a shareholder vote in February.


Allan Brackin, CEO of Volante Group, said the merged entity would be Australia's largest IT infrastructure and services company. The merger was not about rationalisation so no jobs were expected to go, he said.


'I think the main benefit is for both companies. It makes us - as the largest Australian IT services company - much more scaleable to compete with larger companies for services business, especially in outsourcing,' he said. 'This is about growing both businesses.'


Volante hoped to gain from Ipex's large services business targeting government.


'Volante's share of government business has not been huge, but a share of government business is very important to us and one of the reasons this opportunity is a great fit,' he said. 'Although they have good products, this isn't about products.'


Brackin said both brands would continue as well as Volante's relationships with HP, IBM and Toshiba. 'There's no move to change any of that,' he said.


Volante and Ipex have signed a conditional agreement to merge operations. If shareholders approve, the merger is expected to be completed by the end of February, Brackin said.


In a statement released to the ASX this morning, 23 December, Volante said it will issue 59.829 million shares - worth $70 million - in return for all issued shares in Ipex.


Some 50.854 million shares are dependent on performance milestones being achieved, while all shares will be subject to escrow restrictions for one year from deal completion, it said.


'The transaction, which will be earnings per share positive for Volante before goodwill amortisation, values Ipex at approximately ten times the forecast 2004 earnings,' the statement said.


Brackin said the merger would increase Volante revenue 55 percent.


Ipex directors Joel Schwalb, Yoav Schwalb and Michael Stiassny will join Volante's board when the merger completes in February.


Joel Schwalb was not available for comment but said in a statement that Volante had high service standards, excellent flexibility and good management systems. 'There is an excellent cultural fit between the businesses,' Schwalb said.


If the merger goes ahead, most of Ipex's IT services business will be integrated into Volante's Systems division. Volante Systems targets corporate, government and SMB sectors.


Ipex' application development services will be integrated into Volante Solutions - the Volante division that customises business applications.


Volante plans to incorporate Ipex' box-building business separately within the group. Ipex-branded hardware will be sold by Volante Systems - along with products from Volante partners HP, IBM and Toshiba.


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