Change, innovation and acquisitions for growth

Resources Corner

As Deloitte offers us their view on the tech trends set to dominate 2015, we’ve also seen a raft of acquisitions driving growth in the sector.
 
More locally this week we’ve seen iiNet has backed a takeover offer from TPG Telecom valuing the company at $1.4 billion, Freelancer has bought the assets of a freelance job marketplace and aggregator called DoNanza and Computershare has inked a deal to buy a Canadian transfer agency business for a total cost of up to $33.9 million.
 
Meanwhile shares in Newsat slumped 30 per cent as investors responded to interim results and media coverage detailing allegations of poor governance practises.
 
Commentary
 
The Deloitte Tech Trends Report is an annual analysis of those technological advancements that will most shape the business world. This year the role of the CIO is put under the microscope, APIs take their place as a vital business product and the indefatigable Internet-of-Things is morphing once again.
 
The CIO role is set to be transformed. As IT becomes a strategic imperative the role will be a manager, a strategist and a vital connective force across an organisation, rather than simply an infrastructure role. The mindset of a venture capitalist has become a vital tool and it’s the lessons of the lean startup that are driving a focus on flexibility and speed in even the largest and most established organisations. 
 
The API economy is an evolving sector that is becoming hard to ignore. Deloitte’s consultants suggest that APIs form the heart of some innovative firm’s very business model; they argue that it should be treated like a product with rich rewards flowing to those platforms that can create a thriving ecosystem. “Data and services are the currency that will fuel the new API economy.”
 
APIs of course form the foundation for the concept of the Internet-of-Things. It’s a term that’s bandied about with aplomb, and while many understand the transformative potential of the IoT, a precise vision of the nature of this change is harder to come by. Deloitte went some way to helping people understand what the future could potentially look like as it connected current innovative systems to tangible objects through software.
 
A key takeaway point is the threat of “culture and institutional inertia” constraining the innovative potential of companies that are afraid of letting go of the status quo. Disruption is inevitable and as Managing Partner Robert Hillard tells us in his introduction “the only constant in life is change.”
 
M&A action
 
Internet service provider iiNet Limited (ASX:IIN) has backed a takeover offer from TPG Telecom Limited (ASX:TPM) valuing the company at $1.4 billion. The recommended transaction proposes for 6.25 per cent shareholder TPG to buy all the shares that it does not already own in iiNet for $8.60 per share.
 
SpeedCast International Limited (ASX:SDA) has inked what it describes as a game-changing deal to buy UK-based Hermes Datacommunications International Limited for up to $US34 million. The satellite network service provider says the acquisition is of a leading global provider of managed network services for the upstream oil and gas industry. 
 
Freelancer Limited (ASX:FLN) has bought the assets of a freelance job marketplace and aggregator called DoNanza. The online job outsourcing company says the acquisition will be funded from existing cash reserves and is not expected to have a material impact on annual revenue. 
 
Computershare Limited (ASX:CPU) has inked a deal to buy a Canadian transfer agency business for a total cost of up to $33.9 million. The software provider says it has agreed to terms to buy the assets of the Valiant Trust Company from Canadian Western Bank (TSX:CWB). 
 
Collaboration and growth
 
China-based Ecommerce provider eCargo Holdings Limited (ASX:ECG) has announced new high profile merchant contracts setting the company on track to meet key milestones for the 2015 calendar year. The company wants to add 30 key merchants to its stable of international and local retailers seeking to sell products online in China, Australia and around the world.
 
Animoca Brands Corporation Limited (ASX:AB1) has achieved a record number of monthly active users during February with 9.7 million players. The pure play mobile game developer has also advised its portfolio of apps reached 125 million downloads at the end of last month. 

Shares in Animoca Brands Corporation Limited (ASX:AB1) have spiked almost 40 per cent in morning trade after scoring a deal to license the name and image of American celebrity Paris Hilton. The pure play mobile game developer will also have the rights to imagery and content from Paris Hilton Entertainment for use in the company’s mobile apps worldwide. 
 
Singapore Telecommunications Limited's (ASX:SGT) Optus has struck a streaming deal with US based on-demand Internet streaming media company Netflix. From March 24th until July 5th new and re-contracting customers can get a six-month subscription to Netflix through Optus when they sign up for an eligible plan and activate their service.
 
Adslot Limited (ASX:ADJ) has secured a contract with one of America’s largest independent media agencies, Haworth Marking + Media. The media trading company describes Haworth as a significant agency business with a blue chip client roster representing hundreds of millions of dollars in digital media spend. 
 
Electro Optic Systems Holdings Limited (ASX:EOS) has snagged a deal to revamp and upgrade remote weapons systems for the Australian Defence Force. The ADF contract, worth $6.5 million will see EOS upgrade 45 of the weapons systems by April 2016 giving the army greater capabilities in long range technology. 
 
Technology company TZ Limited (ASX:TZL) says it has achieved a strategically important event through inking a memorandum of understanding with accounting firm KPMG. KPMG intends to appoint TZ as the preferred supplier and technology provider for its Day Locker Management System to be deployed at KPMG’s offices across Australia.
 
Cloud-based talent recruitment firm 1-Page Limited (ASX:1PG) has signed a nifty deal with internet giant Amazon.com. Amazon is a Fortune 100 company worth over $US170 billion that employs over 154,000 people. The retailer will use the 1-Page enterprise sourcing platform to find and attract talent.
 
Challenges ahead
 
Vocation Limited (ASX:VET) says it will sell the Australian School of Management and The Australian College of Applied Education to Careers Australia Group for $15 million. The sale has been identified as a way to reduce debt and achieve a more sustainable capital structure during an ongoing review process the company is undergoing. 
 
Shares in Newsat Limited (ASX:NWT) slumped 30 per cent as investors responded to interim results and media coverage detailing allegations of poor governance practises. The satellite communications company widened its first half net loss to $39.7 million over a period in which revenue slid 17 per cent to $13.7 million. Newsat attributed the result to challenging market conditions and weakness in economic activity in the military, mining and gas industries which has led to lower levels of revenue from key customers.
 
Biotechnology highlights
 
Shares in Novogen Limited (ASX:NRT, NASDAQ:NVGN) jumped more than 20 per cent after confirming the potential of one of its drugs to become a major new chemotherapy. The drug developer says Anisina is one of its oncology pipeline drug candidates and has achieved a major milestone in its development.  
 
3D Medical Limited (ASX:3DM) has inked a letter of intent with a division of Telstra Corporation Limited (ASX:TLS), Telstra Health, to explore entering a commercial relationship. Telstra Health is developing an image and data management service and 3D has secured the exclusive reseller rights in Australia and New Zealand to Mach7 Technologies.
 
Shares in Novogen Limited (ASX:NRT, NASDAQ:NVGN) closed more than 38 per cent stronger on the ASX after revealing promising study results. The dual -listed drug developer says US studies have confirmed one of its lead candidate products, TRXE-009 kills brain cancer stem cells.  
 
Impedimed Limited (ASX:IPD) says another world-leading hospital has joined its L-Dex post approval trial. The L-Dex technology helps physicians and surgeon detect changes in cellular fluid levels to detect lymphadema post-surgery.
 
Regeneus Limited (ASX:RGS) has reported positive preclinical results for its off-the-shelf cell therapy treatment for osteoarthritis. The regenerative medicine company says the results confirm Progenza is safe and prevents disease progression in a model of osteoarthritis.
 
Orthocell Limited (ASX:OCC) has been granted ethical approval for a pilot clinical study using Celgro in dental procedures. The regenerative medicine company says the study is to demonstrate Celgro can be used as a barrier membrane to allow bone growth without competition from other connective tissue.