Commander’s limbo state could spell the end

Media representatives for Commander’s receivers and managers – McgrathNicol – confirmed with CRN that mysterious consortium, CTG, failed in its bid to acquire the service providers, telco arm.

However, they couldn’t elaborate on the details of the failure, or, if any other offers were made for Commander’s telco arm.

David Cannon, program manager, telecommunications at IDC said the failure of the bid has thrust Commander and its employees into a continued state of limbo.

“This is never good. It also means the value of the company will more than likely decrease as the administrators seek alternative buyers,” he said.

Cannon believes this could “unfortunately” spell the end for the integrator.

“Commander still has a solid customer base and competitive network infrastructure capabilities, which other tier two telco's could leverage,” he said.

“Only service providers with a solid balance sheet will be able to facilitate the purchase so this limits the amount of potential suitors.

“Unfortunately for Commander the bulk of those potential suitors have already invested in next generation networking infrastructure and hence the real value is in the customer base.”

Geoff Johnson, research vice president, enterprise communications applications at Gartner claims the acquisition failure doesn’t necessarily spell the end of the company.

“Raising capital for even the best business plans are very constrained by the present global credit crisis,” he said.

“Banks are absolutely risk averse in their capital rationing today.

“They have many funding options which are backed by tangible assets rather than cash-flow histories and will remain ‘super-picky’ through 2009.”

Johnson claims the question is at how many cents in the dollar, will be gained from the eventual sale of Commander.

“This is all about the administrators getting whatever they can get,” he claimed.

“The answer is never zero (unless there are big net liabilities) but finding interested players will remain challenging.”

CTG announced its intention to acquire Commander’s telco arm in November 2008.

At the time, McGrathNicol issued a statement claiming, CTG was established by a consortium of local and international investors, who specialised in the information, communications and new media sector.

At the time, Claudio Castelli, senior analyst at Ovum told CRN no local service provider was interested enough to purchase the division.

“I don’t think Telstra or Optus would be interested in Commander,” said Castelli.

“It wouldn’t add much value for them. It wouldn’t complement their existing services portfolio neither add customer base as both already have relations with most of Commanders’ customers.”

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