(MENAFN- ProactiveInvestors)
() will transition into a revenue generating tech play following the acquisition of Cirrus Networks.
Cirrus recorded unaudited revenues of over $6 million for the half year ending December 2014 and has already secured $4.6 million in new contracts in the March 2015 quarter.
The company provides advanced diagnostic monitoring and protection services to networks.
Should shareholders approve the transaction it will also mark Liberty’s exit from the mineral sector.
Andrew Haythorpe managing director for answers a Q&A exclusively with Proactive Investors.
PROACTIVE INVESTORS: Welcome Andrew.
Firstly can you outline the timeline to complete the acquisition of the revenue generating Cirrus Networks
Andrew Haythorpe: We have received the necessary waivers from the ASX.
The next key steps are a Notice of Meeting (NOM) to be sent to shareholders in two weeks subject to ASX review followed by the EGM - which hopefully we will be able to hold the week of the 15th of May.
In regards to the Prospectus it is expected to be available by the end of April and could close quickly if the market demand remains as strong as it is currently.
Therefore the Prospectus might only be open for two weeks from around mid-May. The final step would be re-admission to the ASX as Cirrus Networks.
The readmission and trading as Cirrus Networks should commence at the beginning of July subject to the time spent by the listings committee and the ASX reviewing the documents.
What will be the composition of the board and/or management structure post acquisition
Andrew Haythorpe: Post the acquisition the new board will have Frank Richmond as the managing director as I will be making way as the current Liberty board will resign.
Richmond has a long history of success in the IT Industry has grown Cirrus rapidly and is now ready to expand rapidly beyond Perth base.
The board will also comprise:
Andrew Milner: Chairman; Matt Sullivan: Non-Executive Director; Dan Rohr: Non-Executive Director; and Patrick Glovac: Non-Executive Director.
Moving aside for Richmond and Cirrus Networks is a “no brainer”. We now join a new and exciting business which makes money and grows every day rapidly.
I can see in our share price that investors have not yet caught on to this profound change and the opportunity to buy in below 2c/ share.
Those of us who hold our shares will soon become shareholders in the second fastest growing tech company in Australia in the fastest growing sector.
The change for our shareholders could not be more dramatic or exciting. This growth has been recorded on a local Perth only business. They are now going National and beyond.
I added another 6.6m LBY shares to my holding recently because of Cirrus Networks.
Cirrus Networks is already generating revenue with $4.6 million in new contracts secured in the March 2015 quarter. Is revenue scalable
Andrew Haythorpe: Cirrus Networks is growing at a rapid pace. If we look deeper into the numbers three things are evident.
Firstly Cirrus’ ability to walk in and quickly win “entry level” contracts with the A list of clients.
These jobs are inevitably followed by more substantial Project with better margins.
And now only 2 years after startup are even more attractive recurring revenue stream opportunities as customers learn that they can save even more by outsourcing to a Cirrus Networks they trust rather than continue alone managing their own data systems or being sold something they don’t really need.
Following completion of this acquisition will the new Liberty continue to hunt acquisitions which could provide economies of scale
Andrew Haythorpe: There are few competitors in this space in Australasia. I think of this space as the “data smarter” industry opportunity.
Many of us in business know what it’s like to be overwhelmed with new technology – daily – that demands assessment of relevance and merits.
It is not feasible for CEO’s to become expert in assessing these services daily and be effective CEO’s.
There are many new tech companies some of which offer sensational solutions for clients to manage better with lower costs.
Many of these are potential suppliers or partners who would benefit from Cirrus Networks’ unparalleled ability to access A list clients and convert this access to sales – AND trust.
Any opportunity to grow through acquisition where the targets metrics stack up against the organic growth of Cirrus Networks and its value – that’s something that I will certainly support as a substantial shareholder.
Economies of scale and leverage into the sales pipeline are substantial in this fast moving space.
What are the key catalysts and news flow investors should look for in the near term from Liberty
Andrew Haythorpe: Along with the Notice of Meeting to be sent to shareholders EGM Prospectus and re-admission we are anticipating a Quarterly release from Cirrus Networks for their March Quarter. And Liberty has its March quarter due in 3 weeks’ time.
There may also be new significant contracts in the next few months. If they are signed we will announce them.
Revenue growth is expected to continue with a strong sales pipeline and expansion into new industries.
The expansion of Cirrus’s portfolio into new industries particularly into tertiary education reflects the success of a 12-month strategy to provide solutions for industries outside of mining oil and gas.
PROACTIVE INVESTORS: Thank-you Andrew.
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