Codan (ASX:CDA) subsidiary Zetron to take control of US-based GeoConex

• Codan (CDA) subsidiary Zetron agrees to acquire a 100-per-cent interest in GeoConex, a leading integrator of US Public Safety and Homeland Security systems
• Zetron will acquire 100 per cent of the shares in GeoConex from its founders, who will join Zetron and remain in the GeoConex business
• The acquisition includes an upfront cash payment of $6 million, as well as other deferred payments and possible earn-out payments, to be funded by Codan’s existing debt facility
• Codan says the opportunity is “significant” given future US Government NG911 funding, which aims to upgrade emergency response communications across the US
• CDA shares are up 3.04 per cent, trading at $5.42 at 11:51 am AEDT

Codan (CDA) subsidiary Zetron has entered an agreement to acquire a 100 per cent interest in GeoConex, a leading integrator of US public safety and homeland security systems.

The company will take over 100 per cent of the shares in GeoConex from its founders, who have joined Zetron and will remain in the GeoConex business.

Codan will fork out an initial cash payment of $6 million, as well as three equal deferred payments to a total of an added $2.4 million over the next three years, for control of GeoConex. Additional earn-out payments of up to $14.3 million are also included in the purchase agreement.

Codan confirmed it would fund the acquisition using an existing debt facility.

Zetron President Scott French said the agreement complemented the company’s existing growth strategy.

“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,” Mr French said.

“It is also consistent with Zetron’s growth strategy to continue to diversify and grow by broadening its solutions offering in the public safety sector and communications markets in North America.”

Codan CEO Craig Dotson said the company looked forward to continuing its collaboration with GeoConex.

“Zetron and GeoConex have a long-standing history of collaborating in the market, and we look forward to building upon Zetron’s market-leading presence in North America and accelerating growth in the combined business,” Mr Dotson said.

The company confirmed the deal will be immediately earnings-per-share accretive.

Codan said it now had a “significant” opportunity to capitalise on the future US Government NG911 funding, which aims to upgrade emergency response communications across the United States.

CDA shares are up 3.04 per cent and trading at $5.42 at 11:51 am AEDT.