SOH To Acquire AlphaWest

Document date:  Wed 29 Dec 1999
Published:  Wed 29 Dec 1999 00:00:00
Document No:  199168
Document part:  A
Market Flag:  Y
Classification: 

HOMEX - Sydney                                                        

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SOLUTION 6 HOLDINGS TO ACQUIRE ALPHAWEST

Acquisition To Increase Solution 6s IT Services Capability -

Solution 6 Holdings Limited (ASX:SOH), the world's leading provider
of IT solutions to professional service firms, and innovator in ASP
services, today announced that it has entered into a term sheet to
acquire AlphaWest, a Perth-based IT services provider.

The acquisition is for approximately A$27 million cash and 2.2
million ordinary shares. The transaction is subject to shareholder
approval. AlphaWest's largest shareholder, with approximately 65 per
cent, is Thorney Pty Ltd, which also holds an equity stake of 8 per
cent in Solution 6.

AlphaWest is one of the leading information technology and
telecommunications (IT&T) service providers in Western Australia and
the leading provider of network hardware, installation and support in
Western Australia. AlphaWest is the exclusive distributor for
enterprise resource planning (ERP) software company SAP's small to
medium enterprise (SME) licences in WA. It is also an exclusive
distributor to the SME sector in the region for Solution 6 Centrum.
ASP services.

The AlphaWest acquisition is an important part of Solution 6's
strategy to be a total solutions provider in both software and
services to the professional services market.

The acquisition of AlphaWest follows Solution 6's acquisition of the
Australian and Singaporean operations of CVSI Inc. in July this year.
CVSI was a provider of information technology services, systems
integration and knowledge management solutions.

AlphaWest has approximately 800 customers, comprised of both private
sector and government customers. Private sector clients come from a
wide cross section of industries including the banking and finance
and IT&T sectors. AlphaWest has 261 employees in offices in Perth,
Bunbury and Melbourne.

Services Part Of Total Solution

Solution 6 currently supplier, a comprehensive IT service component
with all the applications it sells. For instance, Global Practice
(CABS2000) requires onsite consulting and implementation services, as
does Solution 6 Centrum applications. Solution 6 also offers
consulting and engineering services to the smaller professional
service firms.

"Right now, there is an IT skills crisis in the Asia Pacific region.
This is one of the biggest problems faring IT companies in the short
term. This acquisition is a direct consequence of Solution 6's desire
to maintain its service standards and to ensure it has the expertise
to deliver total solutions," said Ms Rushenka Perera, general manager
corporate communications, Solution 6. "The acquisition of AlphaWest
will enable Solution 6 to increase the services it can provide
clients in all aspects of their IT&T, network and e-commerce needs.
AlphaWest's business spans services from initial consultation, design
and delivery of an appropriate network, through to systems and
network maintenance, centralised IT helpdesk, application and
e-commerce development."

"We view the acquisition of AlphaWest by Solution 6 as a means of
enhancing our excellent growth prospects," said Hugh Beggs, chief
executive officer, AlphaWest, "AlphaWest has experienced phenomenal
growth over the last three years, including a revenue growth rate in
the last year of approximately 50 per cent. Solution 6 as a global
company offers AlphaWest the resource backing and the distribution
channels to maintain this growth and most importantly to expand our
services capability internationally, added Mr Beggs.

Excellent Fit With Solution 6 ASP Services

AlphaWest also provides specialised ERP software solutions.
AlphaWest's software consultants custom design applications to suit
client's business needs or to adapt existing software packages to
optimise performance. This is increasingly in the area of Internet
and e-commerce solutions.

"Solution 6 Centrum ASP Services are comprised of SAP R/3 ERP
software and Lotus Domino applications. AlphaWest's expertise in the
area of ERP, including ASP services, reselling SAP R/3 and
implementation and support consulting for ERP packages is a very
tight fit with the total solution we are offering via Centrum. As the
sole distributor of SAP in the region and with their proven ERP
implementations, AlphaWest will be a key channel partner in rolling
out Centrum," added Ms Perera.

"The AlphaWest acquisition follows the three expected key strategic
acquisitions of Lawpoint, Elite and Pegasus announced earlier this
month. After AlphaWest we plan to significantly slow the pace of
acquisition, although discussions continue with a number of
companies. The next phase of the strategy is to concentrate on
integration of the acquired organisations into Solution 6," said Ms
Perera.

"With the acquisitions we have made, the aim has been to acquire
companies that have a solid management infrastructure in place that
will continue to manage the operations of the acquired companies. We
have also ensured that the acquisitions have been geographically
disparate and across different business lines so that the burden of
integration is spread.

We recognise that integration is a difficult process, but by
maintaining the current management teams within the acquired
organisations, having spread the burden of integration, and having
established a business unit within Solution 6 dedicated to
integrating new acquisitions, we are confident of the success of
integration of each of our acquisitions to date," concluded Ms
Perera.
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