Networking and storage reseller Harrier has continued its push into higher-margin services by snapping up rival Zeuros for £14m and two million shares.
Harrier, which posted turnover up 22 per cent from £4.5m to £5.4m for the year ended 31 December 1999, will raise the cash by placing nearly six million new shares. The group recorded a loss of £154,000, compared with a loss of £494,000 in 1998, because of the growth of its higher-margin business sectors and a planned increase in overhead costs in sales, technical and marketing activities.
The purchase of Zeuros is Harrier's second acquisition in just under a month. The reseller purchased Re-Net, a consultancy and support services company, for £130,000 in March.
The reseller said the acquisition will help it consolidate its position in the Net and network security solutions market and will increase its range of products and services.
Mark Rowlinson, finance director at Harrier, said: "Zeuros is a similar size to Harrier, but it's heavier on professional services. We have been moving into managed services for two years - that's why we bought it.
It's highly profitable and will be a very good fit for us."
He said the acquisition had more than doubled Harrier's technical staff from 20 to 48.
The two acquisitions will help Harrier grow quickly as Zeuros and Re-Net were both focussed on higher-margin services, he added. "Product sales have a market, but professional services, and particularly the managed services, are higher-margin businesses. We will certainly become a significant player," Rowlinson said.
Sarah Carter, marketing director at Harrier, said the acquisition is expected to generate a lot of business as the VAR will have a "lot more people on the street who can go out and do the business".
Terry Radford, managing director at Harrier, said: "We are delighted with our results and the acquisition of Zeuros. I am confident the complementary businesses, core skills and customer bases of both Zeuros and Harrier Network Solutions will accelerate our growth and positioning in the market."
Harrier Network Solutions has been certified a silver partner of data network security vendor Biodata.
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