Allied sells cabling division

Allied Technologies Group has sold its cabling infrastructure business to KLM Group, in a bid to help fund its planned merger with telecommunications equipment supplier Longreach Group.

Under deal KLM, an ASX-listed electrical, data and communications integrator would acquire all the issued shares in Allied's division, Allied Technologies Australia (ATA) for $2.25m in cash and take over its net liabilities of $1m.

Allied Technologies chairman Michael Addison said in a statement that the sale of the division was part of its plans to merge with Longreach Group, announced on 7 June.

“The sale of the cabling division was the next step in a process to reposition Allied Technologies into the mainstream ICT solutions and services to the Defence, Intelligence and Security Sector,” he said.

"It will simplify the planned merger between Allied and Longreach [and] will add to the $8m war chest earmarked for the impending expansion by the acquisition.”

The acquisition of ATA would be effective of 1 July, although the division would continue to operate as a separate business unit within the KLM Group.

Peter Jinks, managing director at KLM, said the acquisition of ATA gives the company an opportunity to expand KLM’s operations into new business sectors.

“The deal provides KLM with increased exposure to federal government business with emphasis in the defence industry. The Allied business is a good fit with the existing operations of the KLM,” he said.

ATA also has a workforce of 85 personnel across the four operations centres based in Canberra, Sydney, Brisbane and Townsville.