Growth opportunity is expected to be the chief benefit of a takeover of three New Zealand IT companies (and one Australian one) by newly-formed Wellington company Infinity Group.
The group has taken over:
- Trilogy – a multi-faceted company strong on the engineering side but also in hardware, software and solutions selling;
- Quanta Systems – distribution and manufacturing systems;
- Madison Group , an IBM reseller with strengths in AS/400; and
- Australian InfoVista, a start-up e-commerce specialist.
“Some companies grow until they reach a certain point, then growth flattens out, either because they can’t get enough capital” or because of management views and expertise, he says.
The companies will still operate independently from the market’s point of view, though there are opportunities for internal co-working and maybe some for re-organisation.
“Trilogy has a large engineering base and Madison a small one,” says executive director Jon Hartley. “So it may make sense to combine the two.”
But such matters will need to be considered, he says. Baker, however, is adamant there will be no redundancies.
The germ of the Infinity idea came from investment company Active Equity when it bought a 17% stake last year, and later expanded to 50%, in Trilogy. Active Equity is now a majority shareholder in Infinity.
Infinity chose the companies because they fit well and operate in different parts of the market which should complement one another.
Infinity has taken over 100% in all four companies, with Trilogy selling the 50% of Quanta it owned.
“Our approach will be to own 100% of every company we take an interest in,” says Hartley.
Infinity and Active Equity will put venture capital into subsidiary companies, “but we are not a VC company”, says Baker.