Fast50: Acquisition bolsters Commulynx to No.10

By Nate Cochrane on Dec 11, 2009 1:06 PM
Filed under Software

The integrator picked the right time to bolster its balance sheet.

Back in November last year, while most businesses were battening down the hatches, Commulynx was closing in on fellow integrator Red Zed Technologies.

The acquisition target, which was in negotiation with CRN's fast-growing reseller for five months, brought with it numerous small- and medium-sized customers and helped Commulynx nearly double yearly turnover to $1.44 million.

Red Zed bolstered its buyer's balance sheet and ensured it had the cashflow to power through the year ahead, says Commulynx managing director Stephen Knights (pictured). At the time, he said the two would complement each other: Red Zed had annuity customers and Commulynx the project skills and contracts. And the recession helped to pull the deal into focus.

"The best net outcome of the acquisition was volume of smaller transactions completed each month," Knights says. "After the acquisition, the total businesses Commulynx supported or supplied equipment to increased four times while revenue doubled.

"One of the key success factors for Commulynx was promoting our capability through our vendor and distribution partners. The referrals received through this network were and are vital to ensure we are growing while not having to invest heavily in marketing and sales."

In the year ahead, infrastructure choices such as virtualised services will play a bigger role in customers' demands of resellers, Knights says.

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Fast50: Acquisition bolsters Commulynx to No.10
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