ASX-listed broadband hardware vendor NetComm has signed a heads of agreement to acquire 100 percent of New Zealand-based Dynalink Modems and its subsidiary Askey Australia.
The acquisition gives NetComm an instant foothold in the New Zealand market with existing Dynalink retail and distribution agreements, David Stewart, managing director at NetComm told CRN.
“The main purpose for us buying them is their channels to market,” Stewart said. Dynalink distributes in New Zealand through Ingram Micro, Dove Electronics and sub-distributors and is prevalent on the shelves of retailers Dick Smith, Noel Lemming and Harvey Norman in New Zealand.
Twelve Dynalink staff in New Zealand and eight in Australia would be retained as well as the Dynalink name, he said.
Established 15 years ago, Dynalink sells broadband ADSL, ADSL2 and ADSL2+ modems and routers, analogue modems, wireless LAN, networking solutions, USB/TV peripherals and VoIP products.
The acquisition of Dynalink and Askey would add between $10 million and $12 million per annum to NetComm’s sales revenue, Stewart said.
NetComm has a current revenue run rate of between $22 million and $24 million.
Around $3 million in sales are being generated from exports into countries such as the Soloman Islands, Fiji, Saudi Arabia, The West Indies, Vietnam and South Africa.
Askey Australia is jointly owned by Dynalink (81 percent) and ADSL modem manufacturer Askey Taiwan (19 percent).
“The agreement reached between the parties to the acquisition is subject to final due diligence and completion of a share sale and acquisition agreement,” Stewart said.
Due diligence was being undertaken next week and the acquisition was expected it to be completed by 18 December.
Other acquisitions are planned over the coming months, Stewart said, starting with an Australian company specialising in wireless technology, which he declined to name.
NetComm to acquire Dynalink
By Byron Connolly on Dec 1, 2005 2:49PM