Service provider Alphawest has agreed to buy out legal information management specialist Inform Systems Australia for $2.5 million.
Garry Henley, CEO at Alphawest, said the acquisition of all Inform Systems Australia's shares would help the integrator expand its position as a market leader in information services nationally.
More specifically, the deal will give Alphawest vertical strength. Inform Systems Australia specialises in providing information management to the legal sector. "We've been quite broad," he said. It would provide a "focused means" of meeting all the IT services needs of the legal sector, including infrastructure, business continuity and information management, Henley said.
Global companies such as LogicaCMG and IBM were targeting the market at the bigger end of town, while Microsoft was having a go with SharePoint, he said.
However, Alphawest was angling to be Australia's first national information management integrator that was not also a vendor of its own products, he said.
"Today, it's all about ROI and enabling business. Information management covers that whole spectrum," Henley said. "Infrastructure is still very important but information management is really dealing with business issues as opposed to going, 'hey, here's a new widget'."
The services and infrastructure provider's last two acquisitions were also information management businesses, Queensland's PowerPlus in September 2003 and the ACT's Westbourne Group in July 2004.
"That's why we sold the business to Sol 6 back in 2000. [Alphawest] was primarily an infrastructure business, and when we came back ... we put our money into information management," Henley said.
Sydney-based Inform Systems Australia -- a small company with about seven to 10 staff -- markets and supports various products, including document management and collaboration, CRM, workflow, web portal and intranet applications.
"We both sell the most popular CRM in this space, and between us [and US-based Interface Software] we cover the two dominant records management applications - Hummingbird and iManage," Henley said.
Inform Systems Australia had not been up for sale at the time, but Alphawest had approached the company some while ago and convinced the owners that acquisition might be a good option, he said.
"The company has been doing [information management] for quite a few years," Henley said. "It was looking at a next expansion, looking at opening an office in Canberra and Melbourne to go to the next level."
Alphawest was still seeking further acquisitions. In particular, the firm wanted to build up its presence in Melbourne, but had not yet found an opportunity, Henley added.
Ken Parsons, managing director at Inform Systems Australia, said the sale would broaden the IT services the smaller company could offer nationally.
Alphawest provided excellent "business solutions", he said.
Parsons and the rest of Inform Systems Australia's management team will remain at the helm. The companies will operate independently.
Consideration for the Inform acquisition was based on a multiple of current earnings and will be paid mainly in cash, Alphawest said in its statement to the ASX yesterday.
Some $1 million of the $2.5 million would be deferred and a further $500,000 deferred and contingent on future performance, the company said.
"The transaction will be immediately earnings per share positive for Alphawest," the company said.
The acquisition is expected to be completed 1 September.
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