XON has posted record results in revenue and bottom line following its acquisition of the remaining 40% of Merqu Communications.
XON's infrastructure unit, which is made up of the former Merqu Communications business, delivered exceptional results and secured a number of key contracts, including one of the larger municipalities in Gauteng and the State Information Technology Agency (SITA) and has since made strong inroads into the private sector.
"We performed our due diligence prior to the acquisition and knew then that it formed an integral part of our strategy to grow our company," says Carel Coetzee, CEO of XON.
XON initially sub-contracted to Merqu Communications in 1999, then took a 60% stake in the business in 2002 before acquiring it wholly. It was renamed XON Infrastructure.
"We bought all of the assets of the business, offered all of the employees positions at XON and took over the customer list," says Coetzee. "All that remains of Merqu Communications is the former owner and the name, and it has proved to be an excellent move."
The decision to acquire the business began three years ago when XON embarked on a consolidation exercise and programme to boost its infrastructure to deliver services and solutions.
It has since maximised cross-selling opportunities between the business units, and corporate and public markets have been receptive to the basket of solutions.
The result has been stronger revenues by 80% and an improvement to the bottom line of 140%.
"The growth we have experienced is a direct result of our investment in infrastructure, partners and internal skills, as well as acquisitions such as Merqu Communications," says Coetzee.