GDC/Eagle deal crumbles

By ADAM GIFFORD

Merger talks between listed network infrastructure company GDC Communications and Eagle Technology have broken down.

Sources said after several months of talking, the two Auckland firms had been unable to agree on price and direction.

GDC chief executive Paul Honnor and Eagle chief executive Craig Eagle both refused to confirm that the companies had been talking.

"GDC is always talking with people about acquisition, and we cannot afford to talk about any deal until it is done," Mr Honnor said.

Mr Eagle said Eagle's discussions on mergers or takeovers had "narrowed down."

"We've been tied up with one set of interested parties. It's time now to get back to the business itself before we put the boxing gloves on again."

Mr Eagle said his father, company founder Trevor Eagle, had started talks with several companies before his death in December.

"Trevor's aim was to shift the company to a more sizeable entity. We still have that desire and we will be talking to parties we may have synergies with. It's not essential we go ahead and do anything, but because this process was started by Trevor, I want to see it through with those parties," he said.

Eagle Technology is a systems integrator specialising in geographic information, some financial systems, computer training through its New Horizons subsidiary and application development through Eagle Software.

Mr Honnor said he was "not unhappy" with GDC's slight profit fall last year, despite a 23.9 per cent increase in revenue. The company made just over $3 million on revenue of $41.5 million.

Mr Honnor blamed a mid-year drop in sales of business telephone systems, as customers held back waiting for new generation voice-over internet protocol systems.

The company also spent money setting up an application service provider business, iVASP, and a new business unit, OneCom, to sell the new-generation telephones.

"We're forecasting a 70 per cent increase in revenue over the next nine months and a doubling in profit," Mr Honnor said.

Since listing in April last year, GDC has expanded into Hawkes Bay and Taranaki to service Telecom Patch contracts. It also bought Dynamic Communications' contracting operations.