Internet company Destra Corporation Limited has acquired broadband service provider and distributor Techex Communications.
Under the agreement, Destra would pay $1.5 million, comprising $1.2 million in Destra shares and $300,000 cash. Subsequent payments would be made after 12 month earn-out period.
Techex had revenues of around $4.5 million for the 2004 financial year with an EBIT profit of $700,000.
It is believed that Destra would save well over $500,000 in bandwidth costs in the first year as a result of this acquisition.
Destra would retain all Techex staff and Techex company founders Chris Collinge and Mark Randall.
Destra CEO Domenic Carosa claimed the data communications services supplied by Techex are complementary to the hosting and domain registration services provided by Destra.
"We push out a lot of data while being a communications service provider, they pull in a lot of data so by combining both of our networks, we're going to be able to bring down the cost of bandwidth," he said.
"Being about to take their products and pushing them into our customer base and taking our hosting products and pushing them into their customer base - so there's a real leverage of synergies on the top line from a revenue perspective."
Carosa said the company was also exploring similar acquisitions in the future. "I think this is our fifteen or sixteenth acquisition in the last four years," he said.
Operational cost savings would result with the merger of two Sydney offices -- a Destra office in Milsons Point and Techex office in Manly. It was expected that the Milsons Point office would be closed and Destra would run the Sydney operation from Manly.
Techex also has an office in Brisbane and Destra's head office is in Melbourne.
Destra has over 50 staff following the acquisition. The company was also looking to hire additional sales staff, Carosa said.
Destra recorded revenue of $9.1 million last financial year and claimed the Techex acquisition "should bring additional profitability to the organisation."
Synergies between Destra's enterprise hosting division - OZHosting.com Advanced - and Techex offered cross selling opportunities.
Techex services are delivered via a national reseller channel of 130 ISPs, system integrators and VARs.