Davnet takes control in Asia

Davnet's offshore activities moved up a notch this week as the company moved to take complete control of its Asian subsidiaries, and acquired a Canadian business.

To secure the Asian transaction, Davnet has persuaded Swiss company Investa and a number of its clients to exchange their investments in Davnet's operations in Hong Kong and in the US for a direct interest in Davnet Ltd and a much smaller investment in Davnet's Singapore operation. In addition, the investors will purchase new shares worth about $A4.1 million in Davnet Ltd.

It is estimated that the net effect of the transactions will be to issue 14.8 million shares, or the equivalent of about three per cent of the issued capital of Davnet Ltd.

"We are long-term investors and we are determined to see Davnet reach its full potential at the forefront of the IP-powered world - a world that is fundamentally transforming how individuals and businesses communicate," explained Juerg Walker, a director of Investa.

In Canada, Davnet has bought the business assets of R&B Tel Communications, which include a licence to wire Scotia Plaza in Toronto's CBD. Davnet has also bought R&B's share of a joint venture to take 100 per cent ownership of Davnet Canada. The deals are valued at about $A5.2 million and are funded by a share swap.Davnet plans to secure the rights to service more than 300 commercial buildings in Canada's five major cities, starting in Toronto, Vancouver and Calgary in the first half of 2001. Montreal and Ottawa will follow later next year.

AsiaSat deal boosts Telstra venture's capacityTelstra has negotiated an agreement that allows it to use satellite capacity from AsiaSat in the Asia/Pacific region, including Australia. The capacity will be used to support new broadband services and to boost the satellite capacity available to Telstra and the IP Backbone Company being established under the alliance with Pacific Century CyberWorks.

"This significant additional capacity via four high-powered Ku band transponders on AsiaSat 3S as well as the associated flexibility for regional C band wide coverage on AsiaSat satellites will further boost our ability to provide regional and global connectivity," explained John Hibbard, Telstra's managing director of global wholesale.

"The initial capacity reserved by Telstra on AsiaSat 3S will provide national coverage at higher power levels than presently available and will support Telstra's introduction of new broadband satellite services to the Australian market in 2001," Hibbard added.

SurfControl buys an Aussie presence

Multinational Internet management software developer SurfControl has bought itself a viable presence Down Under by acquiring Australian e-mail filter developer EmU Tech and its distributor Lanvision. Steve Purdham, CEO of SurfControl, said that the company, which already holds 35 per cent of the Australian corporate Internet management market with its SuperScout and CyberPatrol products, will use Sydney as a base to develop and market its products throughout the region.

"Acquisition of EmU Tech and Lanvision is central to our strategy of managing the forecast growth in Web and e-mail filtering in the Asia-Pacific region", Purdham said. "Geographically we gain a local presence in a growing market from which we can service Australia, New Zealand and key centres in Asia. Through EmU Tech we also gain additional technology and products in a rapidly expanding and complementary market to our family of Web filtering services".

EmU Tech has a substantial list of high-profile users in Australia, including Panasonic, Medibank Private, the Human Rights and Equal Opportunity Commission and NSW WorkCover, and recently won a contract from the City of Glasgow for 9000 users.

Compaq finds partners for SME Net push

Compaq has joined forces with Web hosting service WebCentral and software developer iNETstore to create complete turnkey offerings for small and medium businesses wanting to move into e-commerce. The offerings will be based on Compaq's NeoServer boxes with a Web site developed with iNETstore's software, Internet access, domain name, and e-mail addresses for staff.

"SMBs typically find the large range of online options daunting," noted Lloyd Ernst, CEO of WebCentral. "This alliance provides extra peace of mind for small business owners, backing their decision to go online with blue chip computing, Web hosting and e-commerce store expertise. It's important for businesses approaching the Internet to walk first then run, and to realise that e-commerce isn't only for the big boys".

Tech One speaks out about Proclaim

Listed software developer Technology One has come out and admitted that the company it has been planning to acquire for some months is a developer of applications for local government users, Proclaim Software. Tech One first indicated that a deal was imminent when it made a share placement in October to fund "a potential acquisition".

Proclaim is a five-year old software house that produces a suite of integrated applications for the local government market. Tech One expects to fork out $A10.6 million for Proclaim in progressive payments over two years.

Adrian Di Marco, managing director of Tech One, said the acquisition was a good fit and was consistent with Tech One's strategy to move into new vertical markets with totally integrated solutions. "We are now able to offer a fully integrated enterprise software solution to local government, all from one supplier," he explained. "Our solution will encompass rating, property and licensing, financials and payroll/human resources."

Proclaim has about 40 staff in Melbourne, Sydney and Brisbane, and Di Marco said he expects the company to double its customer base in Australia over the next two years.

Business briefs

The Australian Securities and Investments Commission has challenged MYOB's financial statements for the half year to June 30 2000 by way of proceedings in the Supreme Court. The case hinges on the way MYOB recorded of assets acquired in April 1999 and the valuation of associated goodwill and amortisation charges.

The Supreme Court of Victoria has dismissed an application by Share Trend Software to set aside interim injunctions obtained by ASIC in October. The injunctions restrain Share Trend and its directors from selling or distributing the Stock Market Navigator V3 software. The trial is listed to start on March 6, 2001.

Macquarie Corporate Telecommunications has opened a $A35 million e-business data centre in Sydney, backed by a range of network management products and services. David Tudehope, CEO of Macquarie, said the centre will help enterprises get online faster, more economically and with greater control. The company plans to roll out similar centres in other Australian cities as customer demand dictates.

Assirt Software, which is a member of the WealthPoint group of companies, has entered a reseller alliance with electronic warehousing company doctrieve Corporation and will market the sureVault risk management service to the financial planning market. "The sureVault service is effectively an insurance policy for the most valuable of business resources, all paper-based or electronic files," noted Mark Percia, CEO of Assirt, who valued the deal at more than $A1million over two years.

Datacasting systems specialist Data & Commerce has agreed to buy fibre optic cable engineering, design and installation company Commcord from Cable and Telecoms (CaT). The deal will be financed by a share swap valued at $A2 million plus $A1 million in cash.

SGI (formerly Silicon Graphics Inc) has extended a software engineering services contract it has with Adacel Technologies to June 2002 and has entered a partnering agreement with the Australian company. Adacel claims it has gained orders worth $A9 million since forming the relationship in August 1999. The contract covers scalable high-performance computing, visualisation and digital media software engineering.

Doom and gloom in the US of A

Apple started this week's rot when Steve Jobs warned investors on Tuesday that the company will lose money in its first quarter, and then the floodgates opened as other companies rushed to make similar announcements of their own. The torrent reached a crescendo on Thursday when Intel issued a warning, and Microsoft shares dropped in value after a Goldman Sach's analyst revised his forecasts of the giant developer's revenue and profit. Events of the week included:

Apple predicted it will lose between $US225 million and $A250 million on revenue of about $A1 billion in the first quarter of its 2001 financial year. The company attributed the revenue shortfall to lower channel sales than expected and blamed the loss on cancellation charges for components;3Com warned investors that both profit and revenue for the second quarter to December 1 will be below forecasts. Revenue is likely to fall between $US785 million and $US800 million, and the loss is likely to be twice as large as previously expected;Motorola added to the voices on Thursday when it acknowledged that it would not meet targets because of poor performances by its semiconductor and personal communications businesses. Sales for the quarter are expected to be about $US500 million off target at $US10 billion, and net profit is likely to be halved to about 15 cents a share;Unisys wasn't happy either, and announced that it planned to flog off its federal computer services business and cut its workforce by five per cent to try and lift profits. The news wasn't all bad, however, Despite a drop in revenue, Unisys claimed its fourth quarter profit should be in line with expectations;But Intel dropped the bombshell after the close of business on Thursday evening when it warned that fourth quarter revenue will not reach target because of a slowing demand for PCs. The company now expects revenue to be similar to $US8.7 billion generated in the third quarter.

Microsoft had little control over the Goldman Sachs revision, which reduced revenue by about $US125 million to slightly less than $US6.8 billion, and lopped three cents off an earnings per share estimate to drop it to $US1.88.

Amid all the bad news National Semiconductor made a net profit of $US106.7 million on revenue of $US595 million in its second quarter. A year ago the company made a net profit of $US70.4 million. Things are not so good when NatSemi looks ahead, however, as the company is forecasting a 10 per cent decline in third quarter revenue.

"I think we are in the second phase of an industry-wide correction"Brian Halla, NatSemi CEO

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