Software developer Adacel Technologies has acquired the Australian subsidiary of BrightStar IT, a US-based consulting and integration company, for an earnings-pending sum of about $11.875 million.
BrightStar IT specialises in enterprise implementations of business process automation, supply chain management, enterprise resource planning and customer relationship management systems developed by SAP, Siebel and Microsoft. While its global operations have been declining of late, BrightStar's Australian subsidiary is one of its more successful operations, with a range of blue-chip clients and solid profitability year on year.
Adacel will buy the subsidiary from the California-based parent and will manage the company as of this month, hoping to integrate the eBusiness operations of BrightStar IT and Adacel by January 2001.
The purchase involves consideration of $2.5 million in cash upfront plus a share and cash option of up to $9.375 million, dependent upon BrightStar IT delivering a $3.875 million EBIT (Earnings before Interest, Tax) for the 2001 calendar year. Adacel expects the acquisition to add approximately $30 million in revenues for calendar 2001, and an incremental EBIT of at least $3 million for the 2002 financial year.
"It's good news for us," said BrightStar IT's general manager of marketing Tim Cory. "Adacel is a similarly cultured company. It has good industry contacts and will provide us with great marketing opportunities."
Cory said that while BrightStar IT had a substantial eBusiness division, Adacel's was "fledgling", and its management considered the acquisition as a step toward becoming a world-class eBusiness consultancy.
Cory said he had not received any indications of staff being made redundant as BrightStar IT is merged into Adacel. "First indications suggest they want all our consultants on board."