Frontline assumes control of Philippine company

Frontline Technologies has announced that it will increase its stake in Philippine company, IT Holdings (ITH), to 100 percent from 49 percent.

The move will give the IT services provider full management control over ITH, which will be renamed Frontline Technologies Philippines. Frontline will also assume the 51 percent stake that ITH owns in Sun Microsystems Philippines (SunPhil), a joint venture company with Sun Microsystems.

Said Lim Chin Hu, president and CEO of Frontline, in a media statement: "Good market timing is critical, and we cannot ignore the opportunities presented by the Philippines’ high-growth telecommunications sector which is a key driver in local IT spending, the local government’s initiatives to diversify and broaden the IT market, as well as the growing influx of investments by Asia-Pacific companies into the country."

Under the terms of the acquisition, Frontline will purchase the remaining 255,000 ordinary shares in ITH from the existing shareholders. The company will pay US$250,000 in cash, while the balance US$550,000 will be paid over a period of three financial years subject to an “earn out” condition where SunPhil will meet or exceed a net profit after tax target of US$1 million in each financial year.

Frontline had first acquired 49 percent of IHT in July 2001 as part of its plans to expand in the Asia-Pacific region.