New Zealand-based Advantage Group plans a major acquisition spree fuelled by “bargains” in the e-commerce market.
Shareholders have agreed to issue up to $36 million worth of new shares to help fund the expansion, which follows $40 million of acquisition spending over the past year.
“With the recent market meltdown, there is a lot of cheap assets out there. We plan to be in an acquisitive mood and pick up some bargains,” says Advantage Group chairman Evan Christian.
Christian says the collapse of dotcoms and the NASDAQ market is “weeding out” the weaker companies.
Most of the acquisitions will be overseas, particularly in the Asian market, because the Asian recession left those countries a little behind in terms of Web Services or eServices.
The Advantage Group also plans to focus on Australia; it will shortly take over its first Australian e-business and will proceed to a joint ASX/NZSE listing.
At a special general meeting last Friday, Christian outlined his company’s recent rapid growth.
“Two years ago, this company was the sick dog of the New Zealand Stock Exchange, with a market cap of $4 million, red ink all over the books and a big question mark over its future.
“On June 1 this year, Advantage was admitted to the NZSE. That’s a significant milestone in the history of Advantage,” he says.
The meeting heard that at the end of Q3, YTD revenues were $42.4 million, up 176% on the same period last year. YTD profits after tax and before goodwill were $4.87 million, up 103%.
Since January, the company has employed another 82 people, giving it 524 staff, and it still has 95 vacancies.
“We’ve weathered the storm. We’re strong and profitable,” he says.
Recent Advantage Group expansion includes taking over Auckland-based software development company Aldridge Punter, Leopard Distribution in Australia, eprocurement company Campbell Pope and Associates for $4 million and Netco, New Zealand’s largest reseller of Eftpos terminals, announced last week.
Other investment includes a joint venture with GSB SupplyCorp and Qixel to build and operate SupplyNet, a B2B electronic procurement portal.
At the Friday meeting, the Advantage Group also pledged to remain “strongly committed” to its investment in troubled e-tailer Flying Pig, which last week laid off 20 staff.