Brennan buys second NEC dealer for over $1M

Brennan's managing director, Dave Stevens told CRN shareholders Tele-IP (TEE) had approved the company’s offer to acquire Tele-IP’s subsidiary telephony business, Tele-IP Network Services.

“The deal will add an extra $8 million per annum to Brennan’s revenues, as well as 35 staff and 4,000 business customers,” he said.

Tele-IP Network Services is one of the largest NEC telephony dealers in Victoria and provides solutions such as PABX, VoIP, maintenance services, handsets and other telephony hardware, which complement Brennan’s existing range of voice, data and IT solutions.

Under the terms of the acquisition, on the 24 January, Brennan paid Tele-IP a goodwill of $1,007,500, plus the accounting value of inventory and fixed assets required by the purchaser.

The acquisition will see Tele-IP Network Services rebranded to Brennan Telephony. Tele-IP’s satellite business Beam Communications was not acquired and will continue trading as a subsidiary of Tele-IP (TEE) Limited.

According to Stevens, the recent acquisition and Brennan’s buy-out of Queensland-based NEC dealer, TSA Communications in October 2007, cements Brennan’s position as one of the leading partners of NEC telephony solutions in the Australian market.

“Brennan is now eyeing further acquisitions this financial year to strengthen its telephony proposition and support its push for dominance in the mid-market. Building out our telephony business is a key focus for us in 2008,” he said.

“Most of our clients have a national presence and currently there are no truly national telephony vendors who can effectively service their needs. We noticed a gap in the market and we are looking to fill it both through our reseller arrangements and investment in growing our telephony business.”

Stevens claimed there were massive opportunities in the NEC VoIP market for Brennan, despite NEC's market share drop. He said the drop occurred because NEC’s channel was traditionally dealing with departments within an organisation that are not responsible for purchasing technology.

“There are no good reasons why NEC VoIP products aren’t seen to be on par with Avaya or Cisco products. Now that IT purchasing power has moved from chief financial officer to the chief information officer (CIO). Brennan has strong relationships with CIOs and it will become a much easier solution and service sell,” he claimed.

Now that Brennan has a foothold on the NEC VoIP service market in Queensland and Victoria, it hopes to have traction in New South Wales as well.

“It’s important that we get a footprint in the NSW market and if we don’t get one through an acquisition then we will build a business. Once we have got that large market started we will then look at expanding into Perth, Adelaide and Canberra,” said Stevens.

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