Provenco Group expands Symbol distributorship
18 January 2005
Provenco Group expands Symbol distributorship into Australia
Provenco Group Limited (NZSX:PVO) today announced the planned acquisition of Javelin Systems (Asia Pacific) Pty Limited, a Sydney based company. Provenco’s New Zealand subsidiary, Transtech Distributors Limited announced that it would appoint Javelin as its Australian distributor of Symbol Technologies Inc. (NYSE:SBL) range of products.
Transtech has Australasian distribution rights for Symbol. Symbol is a world leader of mobile data management systems and services. Symbol's scanning technology is used in New Zealand by a number of large retail and warehousing operators.
“Retail and transaction technology distribution is a core business of the Provenco Group. The acquisition of Transtech Distributors in September 2003 expanded this capability considerably. Now we intend to expand this capability into Australia through the proven technology distribution competency of Javelin,” said David Ritchie, CEO of Provenco Group.
“Javelin is a very good fit with our existing businesses. It allows us to improve our product offering, and it enables us to grow into the Australian market.”
Symbol managing director Kurt Hansen said from Melbourne “the expansion of Transtech’s distribution business into the Australian market via the acquisition of Javelin by Provenco is a very exciting development for Symbol. We have been looking to expand our market share within Australia so the experience offered by Javelin and Transtech are the ideal vehicle for us”.
Javelin managing director, Matt Maley will continue to manage the Australian business.
“The purchase of Javelin by the Provenco Group and its ability to bring the Symbol distributorship to Australia adds a strong platform for accelerated growth to our core business of touch screen technology solutions and portable (RF) radio frequency solutions. I am impressed by the strengths of Provenco and look forward to developing Javelin as part of the Provenco Group”, said Javelin’s Matt Maley.
Terms of the acquisition
The purchase price for this acquisition is made up of two components: (i) a base price of approximately A$3.4 million to be paid on settlement; and (ii) future payments of up to A$4 million, to be made over the next four years. This acquisition is conditional on completion of due diligence.
The base price itself is made up of a cash payment of approximately A$2 million, together with the issue of Provenco Group shares for A$1.4 million at 75 cents each. These shares will be subject to transfer restrictions for a two year period after settlement and underwritten at 75 cents for this period. The future payments for the deferred settlement will be paid in cash at the completion of each financial year for the four financial years following settlement, with a cap on total future payments of A$4 million. Payment of the deferred settlement will be subject to the financial performance of Javelin over the four year period.
Provenco Group does not need to seek shareholder approval for this transaction. The date for satisfaction of the due diligence condition (unless extended) is 27 January 2005, with settlement scheduled for 31 January 2005. If declared unconditional, the transaction once settled, will take economic effect from 1 January 2005.
The Board of Provenco Group is currently reviewing its earnings expectations for the second half of the 2005 financial year which is very dependant on the timing of large international contracts. It anticipates being in a position to make a further market announcement next week following the next Board meeting.
The Board has previously advised the market that the operating profit for the first half of the current financial year is expected to be in excess of $4 million, and the company is confident that the early position of the results for the six months ended 31 December 2004 is consistent with the previous announcements.