Software licensing distributor, Newlease, has been acquired by ASX-listed FRR Corporation (ASX:FRR).
The acquisition involves the issue of FRR shares valued at $13.5 million. FRR plans to have a single focus on the IT sector and will divest its remote accommodation interests as a result of the Newlease acquisition.
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Historically, FRR provides services in refrigeration and air conditioning sectors, as well as permanent and semi-permanent transportable accommodation for the resources and construction industries.
As part of the acquisition, FRR will be renamed as Rhype, which will wholly own Newlease. The Newlease business name will remain.
Post-merger the two organisations will have a cash reserve of about $2.5 million and no debt.
There will be a number of changes made to FRR's board with Mike Hill remaining as chairman of the group post completion. New appointments will include the founders of Newlease Doug Tutus (CEO) and Dawn Edwards (COO) as executive directors.
Laurie Sellers and Michael Everett will join the board as non-executive directors, and Philip Kapp will remain as non-executive direc tor. As a result Jonathan Pager and Leigh Curyer will resign from the board and join the advisory committee.
According to a statement from FRR, Newlease has achieved strong compound annual revenue growth of 47 per cent per annum during the past five years. In fiscal 2013, Newlease recorded revenue growth of 36 per cent in comparison to 2012.
The transaction will be subject to shareholder approval and other matters associated with ASX re-compliance. A new prospectus will be lodged with the ASX on December 20 and a shareholder meeting will take place on January 20.
Cash funds will be used for working capital and growth investments as Newlease will continue its expansion into South East Asia and add more software licensing products to its portfolio.
Newlease currently has sales and support offices in Melbourne, Sydney, Auckland, Singapore, Bangkok and Manilla, and is in the process of opening a new office in Kuala Lumpur.
More to follow.