Acquisition of MyDruid Services SDN. BHD 01/04/2004
Axon acquires Malaysian Offshore Services Partner
London, 1 April 2004: Axon Group plc, the business transformation consultancy, today announced that it has agreed to acquire the entire issued share capital of MyDruid Services SDN. BHD, an offshore services partner based in Kuala Lumpur. Axon will initially acquire 51% of the share capital of MyDruid for a consideration of 3,366,000 Malaysian Ringgits (£480,000) to be satisfied in cash.
It has been agreed that Axon will acquire a further 25% of the share capital of MyDruid on 31 March 2007 and the remaining 24% on 31 March 2008. Consideration for the purchase of this 49% will also be satisfied in cash and will be based on the profitability of MyDruid and the margin improvement for Axon. The overall acquisition cost is capped at 30,000,000 Malaysian Ringgits (£4.28m) or, if lower, 10 times the cumulative profit after tax of MyDruid for the period from 1 April 2004 to 31 December 2007.
In the year ended 30 April 2003, MyDruid made a loss before tax of 809,000 Malaysian Ringgits (£115,000) on turnover of 8.4 million Malaysian Ringgits (£1.2 million). MyDruid had net liabilities as at 30 April 2003 of 347,000 Malaysian Ringgits (£49,000). As at 28 February 2004, MyDruid had net assets of 2,620,856 Malaysian Ringgits (£374,000).
MyDruid was formed in January 2004 following a management buy-out of part of the Asia Pacific region of Xansa plc. The operation provides SAP Solutions Implementation and Applications Management support for over 20 local clients in Asia. Since transfer to MyDruid, the operation has become profitable, and is returning to steady growth.
The acquisition of MyDruid supports Axon's strategy in two key areas. Firstly, it provides a beachhead into Asia, from which Axon intends to grow the local client base, focused initially in Malaysia, Singapore, China and Korea. Secondly, the Applications Management centre in Malaysia will become Axon's off-shore and on-shore capability centre for the region, providing resource to support both local and global clients. The acquisition will not have a material effect on the Group in 2004.
Commenting on the acquisition, Mark Hunter, Chief Executive, said:
'The acquisition of MyDruid in SE Asia is an important addition to our existing
operations in the UK, US, Middle East and Australia and it enables Axon to compete
even more effectively in the global business transformation market. I would like to welcome the MyDruid team on board, and I look forward to working with them to
deliver the next phase of our growth.' |
