Pursuing its goal to become a pan-European networking distributor, Azlan has acquired Akam International, a Dutch networks distributor and services organisation.
Azlan will pay up to #29.6 million for Akam. It will pay an initial consideration of #22.6 million, a further #5 million conditional on the new subsidiary meeting performance targets over the next six months, and then a final #2 million if targets are met up to April 1999.
Akam is attractive for its installed base in Holland and Belgium and its range of activities, which complement Azlan's. Akam is best known for network computer training - a market in which Azlan has also been expanding - but also has a large network distribution business and supplies point of sale hardware, consultancy and support services. The company's 1995 turnover was NLG74.9 million (#26.6 million) with operating profit of #1.2 million, and this year Akam says it will make at least #3.4 million in operating profit.
Azlan will aso raise #48.5 million through a three for 10 rights issue that will involve the issue of 8.2 million new shares. This will be used to finance the acquisition, to refinance Akam's #2.5 million debt and to support organic growth, particularly investment in services and training activities in mainland Europe.
Azlan now operates in 11 countries and has 13 training centres in Europe - training accounted for 25 per cent of its pre-tax profit in the first two quarters of fiscal 1996.
In that period, turnover rose 74 per cent to #126.5 million while pre-tax profit was up 36 per cent to #6 million. Gross margin slipped slightly from 24.4 per cent to 24.1 per cent.
Michael Brookes, chairman of the Azlan Group, said in a statement: "Trading in the second half is in line with directors' expectations and, with continuing investment in the development of new products and services, Azlan is creating further opportunities to develop and grow the business. The group continues to look at other small acquisition opportunities."
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