Plain sailing for newly-listed Alphawest

Services provider and reseller Alphawest plans to keep a steady hand on the tiller in the wake of its ASX listing.

Garry Henley, CEO at Alphawest, said the Perth-based company, which listed on the ASX this month, would continue its long-term policy of organic growth and tactical acquisition.

'Now, it's back to business as usual. We're looking at local organic growth and some sort of tactical acquisitions, [which is how] we've always grown the business in the past,' he said.

Alphawest had funded growth by acquiring numbers of small companies right from the start, Henley said, but this year it would perhaps mainly consider buying companies in the information knowledge management space.

'We still think that's a good market,' he said.

Alphawest had recently bought a small Queensland company in that space, PowerPlus, just before Christmas 2003, he said.

'It tends to be on a state by state basis. The market's still really fragmented, but that's part of our ongoing strategy,' Henley said.

Alphawest's infrastructure services business was also expected to play an important role in growth this year, he said.

'Parts such as Queensland are beginning to grow organically, and also in South Australia. In Sydney we think there's still plenty of growth around infrastructure and IP telephony and storage and security,' Henley said.

Alphawest had 80 of its total 361 staff in its Sydney business continuity, knowledge management and infrastructure divisions, he added.

He said the reseller's Singapore office was also expected to do well, particularly as the effect on the market from Sudden Acute Respiratory Syndrome (SARS) subsided. SARS, a flu-like disease, spread rapidly across Asia in the first part of 2003, causing supply chain disruptions and factory closures.

'Last year, [Alphawest in Singapore] was badly affected by SARS,' Henley said. 'They've now got a strong [supply] pipeline up in China.'

Meanwhile, he said Alphawest would keep its collective fingers crossed that recent large acquisitions -- such as Telstra's takeover of Kaz and IBM's of Logicalis -- would enable the number three player to sneak up on its rivals.

If those rivals had their eyes on each other instead of on the ball then Alphawest might potentially score more goals, he said.

'The history of large IT mergers and acquisitions hasn't really been a good one,' he added. 'And we compete with [rival integrator] Dimension Data as well.'

Increasing pressure has been tipped to bear on DiData as a result of the IBM-Logicalis buyout.

Henley also thought the prices paid for such companies had been 'interesting', he said.

He pointed out that the amount of capital-raising activity going on suggested IT might be entering a mini-bubble phase that might not translate into revenue for players.

'There's plenty of money around, but it's just a matter of backing the right horse,' Henley said.

Alphawest's listing in early April is expected to enable the services provider to pay back around $8.94 million out of a total $15 million of monies owed to Solution 6. In 2002, Alphawest management –- led by Henley -- staged a buyout of Alphawest, which was at that stage the IT services division of Solution 6.

'If you go back to the original business, before Sol 6, that's very much how we grew the business  -- by about 12 acquisitions over a few years,' Henley said.

'The big challenge [in acquisitions] is getting them in and getting the value out of them,' he added.

Henley said he was pleased with Alphawest's initial share price. The company listed on Tuesday 6 April and shares closed the first day around 55 cents, Henley said.

'The main thing is to keep an eye on the ball,' he said. 'We worked pretty hard to get the whole process right.'

Alphawest vendors, a category comprising mainly Alphawest management and staff, will retain 21.3 percent of the company's shares.