SkyNetGlobal buys its sole distributor

Wireless broadband provider SkyNetGlobal has bought out its sole Australian distributor, broadband and home automation vendor SmartConnect (Wholesale), for $2.1 million in cash and shares.

Jonathan Soon, CEO of SkyNetGlobal, said SmartConnect holds exclusive Australian retail distribution rights to an X10-standard range of modules and kits that enable users to automate and in some cases Internet-enable standard home appliances such as lights, TV, ovens and video. X10 is a standard which runs over electricity wires.

'Harvey Norman and Dick Smith Electronics are already selling these products and they're selling well. Though the market is new, a lot of work has been done on the business,' Soon said. 'And we believe it will pick up in the next 12 to 18 months.'

He said the acquisition of SmartConnect - which will change its name to W Home Automation - would enable SkyNetGlobal to augment its previous business focus and increasingly target consumers with broadband and associated products.

'W Home basically has a broadband business where they provide broadband services to residential apartments as part of the value-add as a home automation company,' he said. 'If you want to buy a home automation product, you'll normally want a broadband product as well.'

Soon said the company sought resellers and distributors, and was negotiating with several potential partners.

'We had one - until we decided to buy them,' he said.

According to Soon, SmartConnect offers about 20 different home automation products. One has modules and an eight-in-one remote control for lights, TV, hi-fi and home theatre. The next product up enables a PC connection and includes software enabling macros to be set up that can switch the appliances on or off as required.

'The software enables you to dial in from anywhere in the world and access the devices ... So you can turn air-conditioning on and make it 25 degrees Celsius for when you get home [for example],' he said.

Soon said the existing SmartConnect business should generate total revenues of $6.62 million and earnings before tax of $670,000 in the year ending next June. SmartConnect distributes to consumer electronics retail chains such as Tandy, Powerhouse, Retravision and Domayne as well as Dick Smith Electronics and Harvey Norman.

While could not quantify the potential for the home automation market in Australia, Soon said SkyNetGlobal expected to release statistics pertaining to potential market size in about three weeks.