“Sausage’s core offerings perfectly fit with
Solution 6’s e-Business platform,” read Solution 6‘s (SOH)
release announcing its intention to merge with
Australian Internet software pioneer Sausage Software
(SAS) in a 6 for 10 stock swap Monday morning. News of
the Aus $3.5 billion deal sent stock in both companies
skyrocketing. At 1430 AET, Solution 6 stock was up
18.85% at $11.35 while Sausage added 12% to $6.50.
Board members of the new entity emphasized the
complementary nature of the deal. “Sausage has well
established distribution channels and good global
reach, which is important for Solution 6 as we grow
our business in overseas markets,” said Chris Tyler,
CEO of Solution 6. “Sausage also provides access to
over 800 SMEs (small and medium enterprises) around
the world, into which Solution 6 can market our
e-Business platform. On the flip side, Solution 6 will
be able to market Sausage ecommerce and ERP solutions
via our 10,000 accounting firms to their clients – the
SMEs. I see that we will get a tremendous amount of
synergy from this merger.”
Solution 6 added Sausage will also bring to the
combined entity: Strategic relationships with Intel,
America Online/Netscape, Looksmart, Broadvision, Sun
Microsystems, St George Bank and Telstra and over
1,100 IT professionals (that figure includes staff
from SMS Consulting which Sausage is in the process of
acquiring).
Ted Pretty, managing director of Telstra’s
convergent business division, joined the Solution 6
board and has been offered the position of chairman at
the new look Solution 6. Sausage CEO Wayne Bos will
also join the board and has been offer the position of
director.
The deal values Sausage at $1.6 billion on a fully
diluted basis.
Solution 6 also announced it will purchase Telstra Corp.‘s
(TLS) eConnect business assets, Telstra’s stake in
Asia-Pacific joint venture PlesTel and rights to
Telstra Financial Management Services for scrip worth
Aus $237 million. After it injects a further $50
million, Telstra will own approximately 40% of
Solution 6 and is entitled to a similar portion of
Sausage.
To further complicate matters, Telstra will
receive 50% of the equity in Iguana, Solution
6’s the financial information services vehicle. Iguana
will power both the Telstra.com and Solution 6’s
e-ccountancy.com with financial information from both
New Zealand and Australian stock
exchanges.
