Eforce moves to scale up its activities

By ADAM GIFFORD

Listed e-commerce company Eforce is to more than double its size by merging with Auckland-based Product Sourcing International, and buying the Christchurch marketing and web development agency Imagic.

Eforce chairman Richmond Paynter says the moves will give Eforce a combined first year revenue of $51 million and an esti-mated pre-tax profit of $2.1 million.

Eforce was created by its chief executive Mark Fulton to provide its shareholders access to online services.

It was bought by listed South Island sawmiller Paynter Timber, which then sold its timber assets and adopted the Eforce name.

So far people can use the Eforce portal to change their electricity supplier or subscribe to magazines.

Mr Paynter says the purchases are part of a plan to build a fully integrated end-to-end global e-commerce organisation for the business-to-business and business-to-consumer sectors.

"We regard the whole business-to-business area as a growing part of e-commerce and it has a lot of opportunities to add value for shareholders."

Eforce currently has 27 million shares issued. A further 36 million new shares will be issued at yesterday's price of 40c to buy Product Sourcing, making Product Sourcing's current shareholders the largest shareholding bloc within Eforce.

Product Sourcing's managing director, Bill Farmer, will become Eforce's chief operating officer and a director. Its chairman, Jack Porus, joins Eforce's board as an independent director.

Product Sourcing was started in 1990 to take advantage of the end of import licensing, and now provides retailers with supply chain management services such as product identification, quality control, freight, delivery, import/export documentation and currency management.

It has offices in Hong Kong and China, and affiliates in Vietnam, Malaysia and Indonesia.

The company has developed its own software for business-to-business e-commerce.

Imagic will be bought with 3 million new Eforce shares. Imagic founder and director Paul Fairbairn is Eforce's creative director.

While Product Sourcing and Imagic will continue to operate independently in their areas of expertise, Eforce intends to integrate the supply chain management, web development and consumer portal aspects of its business.

The acquisitions are subject to due diligence and shareholder approval at the Eforce annual meeting in May.

Mr Paynter said the new shares will be subject to conditions, but would not say when the new shareholders will be free to sell down their holdings.

The stock exchange's market surveillance panel yesterday asked Eforce why its shares have risen by 10c since last week.