Cellnet said it would pay $1.4 million in cash for Cassa, and assume debt of $2.31 million. A deferred payment of up to $2.5 million is payable providing Cassa achieves minimum profit targets for the financial year ending 30 June, 2004.
Headquartered in Brisbane, Cassa distributes ASUS notebooks, motherboards, video and multimedia cards, networking and memory products and had revenue of around $20 million for its year ending 30 June, 2003.
Cellnet expects to grow the Cassa business by up to 20 percent this financial year, according to Stephen Harrison, managing director at Cellnet.
Darryl McDonough, chairman at Cellnet, said the acquisition represented a strategic fit for Cellnet and would boost the group's IT operations. “Cassa allows us to expand into new markets and complements our IT Wholesale business,” McDonough said.
Chris Hill, managing director at Cassa told iTnews that the acquisition gave it the ability to expand into NSW, Victoria, South Australia, Western Australia and New Zealand via Cellnet's network.
All 18 Cassa staff have retained their jobs and will be rolled into the Cellnet group of companies (which also includes IT Wholesale) as a separate division, reporting to Darryl Tucker, managing direcotr at IT Wholesale.
The company would also hire additional staff in Sydney, Melbourne, Adelaide and Perth. The name will also be retained and Cassa will work “alongside IT Wholesale,” he said.
Harrison said Cellnet would employ the same national expansion strategy with Cassa as it did when it acquired IT Wholesale almost four years ago.
“We originally entered the IT market in October 1999 because of the growing convergence between telecommunications and IT products. That strategy is paying dividends with IT Wholesale continuing to gain greater market share. It [Cassa] has got good potential,” he said.
There are no other immediate acquisitions planned, but Harrison said the company is always on the lookout for good business.
Cellnet shares were trading at 62 cents per share on the ASX on Wednesday morning following the announcement.