WITHIN a month of announcing its arrival in Perth, Change Corporation has signed the first of what is expected to be a number of corporate deals.
WITHIN a month of announcing its arrival in Perth, Change Corporation has signed the first of what is expected to be a number of corporate deals.
The IT services firm, which is headed by former executives of Method and Melbourne-based SMS (formerly Sausage Software), has signed a Heads of Agreement with the troubled IT services group Chrome Global.
Chrome will take an initial 5 per cent stake in Change at no cost, and will have the option of buying additional stakes in the future.
The companies will collaborate to provide information technology services and consulting, as well as the development, distribution and marketing of new products.
Change has also formed a co-location alliance with Mainsheet Corporate, the corporate advisory subsidiary of legal firm Freehills.
Mr Langsford said Mainsheet and Change believed there was compatibility in the coupling of the two firms’ expertise, and although no third-party deals had yet been done, the firms had a strong base to build upon.
The deal with Chrome was also a fortuitous coupling, Mr Langsford said, as it combined public relations experience with technological expertise.
A deal such as that with Change was crucial for Chrome to support its assertions that it was back in business and operating well financially.
The company was placed in administration in October 2001. Earlier that year, a share placement by the company raised just $80,000 of a proposed $594,000, which was to be used to buy two public relations practices, PPR (WA) and RHK.
In January this year the company was released from administration after it raised cash through a direct placement of equity and a convertible note with Tian Li Holdings Pte Ltd. Another $145,000 was raised via a public issue of 29 million shares.
Mr Langsford said the main benefit of the deal from Change’s perspective is the services of additional IT developers in Perth to tap into a number of Chrome’s Sydney clients.
“If you go back to why Chrome hooked into PPR in the first place, there was a vision of a congruence between IT and public relations,” Mr Langsford said.
“I think this deal is saying there is an opportunity to generate IT services out of PR contacts in the corporate sector, but operationally they probably don’t sit well together – there’s cultural issues and so forth.”
