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Wednesday, 10 November 2004 13:28

Commander pays up to $16.8m for Samsung telephone distributor

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Commander Communications (ASX:CDR) has signed an agreement to pay between $9.5 million and $16.8 million for Samsung telephone systems distrinbutor LSP Communications Pty Ltd. LSP is the exclusive Australian master distributor of the Samsung OfficeServ and DX ranges of communications systems.

According to a CDR statement, LSP currently sells approximately 300 systems per month and has established an installed base of over 20,000 systems.

Commander Managing Director, Adrian Coote said, "We will pay between $9.5m - $16.8m (dependent on future performance) for LSP. We anticipate the acquisition will deliver revenue from current product sales of approximately $20 million in the first 12 months following the acquisition. As a result, the acquisition will be earnings per share (EPS) positive immediately."

Commander considers the acquisition of the Samsung business as an extension of the strategy it embarked upon when it acquired RSL COM. Commander expects to gain significant synergies from selling network services into the existing installed base and bundling network services to new system sales.

The acquisition will be funded from operational cashflows and the undrawn components of Commander's $79 million line of credit with its bankers.

CDR shares closed up 4% to finish on $2.11 in brisk trading.


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Stan Beer

Stan Beer assists with Digital Advertising installation and monitoring of advert performance. With 35 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications. Any previous news story submissions should be director to editor@itwire.com and advertising enquires to andrew.matler@itwire.com

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