Pacnet's acquisitive hunger for a target in Australia stems from wanting to snap up multinational customers who have decided to use the country as their base, according to the company's CEO.
Bill Barney
(Credit: Pacnet)
In an interview with ZDNet.com.au, Pacnet CEO Bill Barney said that companies like Cisco, Citibank and American Express had placed major bases in Australia because they had found the engineering talent necessary. "Australia gets a disproportionate amount of multinationals," he said. "We've won these multinationals by going after them in Australia."
Part of Barney's plan to further this goal was to buy a local telco and after a press frenzy two weeks ago on whether his company would buy AAPT, he was ready to confirm his interest, saying that he was definitely looking into the Telecom NZ subsidiary.
With Telecom New Zealand maintaining that it is committed to AAPT, however, Pacnet has a backup plan. "There are other options in Australia," Barney said.
While Pacnet is looking out for companies like AAPT which are large and have assets that Barney said aren't being utilised as fully as they could be, it also has its eye on growth companies, which he believed were struggling in the financial crisis.
"I think this environment is a difficult one, especially for growth companies," he said, adding that not as much cash was being generated, which such firms would usually use to fuel their growth.
The environment has also made gathering money for ventures difficult, but Pacnet hasn't had trouble finding finance for buying companies, according to Barney. He said that its investors were fully behind the company making strategic acquisitions because it had a proven track record of generating capital from them.
There had been no formal offers made as yet, Barney said, but when asked if any companies had received an acquisition query he would not comment. Apart from AAPT, he was also unwilling to name names of those he was interested in.
After a new round of redundancies last week at PacNet what was the thinking behind this offer .. they have not yet integrated Pacific Internet and have had a mass exodus of management from their business in the last 12 months. It is well known in the industry that the merger of Asia NetCom and Pacific Internet has cost sales, profits and exposed management limitations. AAPT would be a bigger challenge and there simply isn't the management bandwidth or the investor cash to make it happen.
The PacNet offer was a swap of inflated valued shares for equity.
Curious these offers from PacNet all come at Christmas as the CEO wants to spend more time at his holiday home in Christchurch ?