Amcom Telecommunications, a Perth based company, has recently given a proposal to acquire IP Systems for up to $20.5 million. The telecommunication giant takes this step to expand its product range into enterprise voice solutions.

IP Systems is a voice and communications technology provider and operates an IP network over a fibre backbone in Australian and New Zealand cities. It has operation centers in Melbourne, Sydney, Brisbane, Canberra, Adelaide, Perth, Auckland and Wellington.

The acquisition will provide Amcom the opportunities to extend its market footprint, as after the deal, if approved, Amcom will have its offices in most major capital cities. Amcom believes that the acquisition of IP Systems would contribute about A$12 million in annual revenue.

"This gives us the potential to significantly increase Amcom's share of our customers' spend on telecommunications services. This means Amcom can better serve the needs of national customers and grow our business," said Clive Stein, chief executive of Amcom.

According to the offer, Initial consideration for the acquisition will be around A$6.5 million, A$5.3 million in cash and 4.1 million Amcom shares at 30 cents each. Further Amcom will issue more shares, with a minimum floor of A$3 million and a maximum cap of A$14 million.