Codan buys US communications business, reveals Africa sales challenges

Communication and metal detection company Codan has acquired US communication integrator GeoConex LLC as part of the company’s strategy to add technology and capability through bolt-on acquisitions to accelerate growth.

At the same time the Adelaide company reported group revenue for the first half of $211.8 million, down 18 percent on the previous corresponding period which, while in the upper half of guidance, included metal detector sales in Africa which suffered from ongoing disruptions.

Codan subsidiary Zetron Inc will buy the company for a cash payment of $6 million and deferred payments of $2.4 million, with further payments of up to $14.3 million should growth targets be achieved in the next three years.

GeoConex’s founders will remain with the business.

GeoConex operates in the US Public Safety and Homeland Security systems fields, providing computer aided despatch and mapping solutions.

The systems are used by despatchers, call-takers and phone operators in emergency call centres to prioritise and record incident calls, technologies which add to Codan’s core communications businesses.

Zetron President Scott French said the two companies had been working together for 13 years.

French said: “This acquisition continues to extend Zetron’s end to end solutions, expands our recurring support services and increases our value to our end customers and distribution channels.”

Meanwhile Codan’s six months results were buoyed by strong results in communications which were up 16 percent, helping the company achieve a more predictable and stable revenue base.

Communications segment margins were up 16 percent and the segment’s order book stood at $136.6 million, a 16 percent rise.

Codan Chief Executive Alf Ianniello said the results came in a challenging macro and geopolitical environment.

Ianniello said: “Our metal detection business experienced a challenging first half within the African market, however with continuing investment into new product releases, e-commerce initiatives and geographic expansion, Minelab (Codan’s detector brand) will continue to be a great business for Codan.”

Picture: GeoConex