If Amcom Telecom (ASX:AMM) proceeds with the acquisition of IP Systems, the deal is likely to be earnings accretive within its first year of contribution, according to managing director Clive Stein.
Amcom on Monday announced plans to acquire converged voice, video and data solution developer IP Systems for up to $20.5 million in cash and shares.
The acquisition would add around $12 million of annual revenue to Amcom’s earnings, with earnings benefit starting to feature in FY11, Stein said in an Open Briefing.
He added that he expects profit to increase by at least 20% in FY10, even after taking into account the acquisition costs, which include an upfront cash payment of $5.3 million.
Amcom is expecting earnings of $9.5 million for the full year.