Datacom, Red 11 merge

The increasingly competitive and evolving information technology market has resulted in the demise of a locally-founded player.

Red 11 has officially become part of Datacom Systems resulting from a non-financial merger seen as mutually beneficial to both companies.

The decision formalises a longstanding working relationship between the two companies.

Two Red 11 staff members - Sales Director Mark Smith and Customer Experience team member Malory Lofthouse - have joined the Datacom team while the handful of remaining Red 11 staff either left the company to pursue other opportunities or took redundancy.

Datacom Systems has around 90 staff working in Western Australia and is part of Datacom National, which operates in Australia, New Zealand, Malaysia and the Philipines.

Datacom National reported revenue of $866 million from its international activities over the 12 months to the end of March - resulting in $35.9 million profit.

The WA-based Datacom Systems is expected to achieve turnover of $76 million during the current financial year, of which between $8-10 million will come from business generated from Red 11.

Red 11 was also a profitable, but Mr Smith said it took the opportunity to become part of Datacom as a way of keeping pace with the evolving sector.

“We believe the winning combination of Datacome Systems WA’s support network and multiple lines of business combined with Red 11’s innovative business process will provide the perfect synergy for our clients,” Mr Smith said.

Managing director of Datacom Systems WA Basil Lenzo said absorbing Red 11 would open the door to more business opportunities.

“This step is an indication of both firm’s willingness to move with the times, taking advantage of what can be an exceptionally fast paced and rapidly evolving industry," Mr Lenzo said.

The merger follows Datacom System’s acquisition of fellow IT company XciteLogic last year, which had gone into administration owing debts of nearly $4 million.