Commander managed services sold to CSG

Commander's managed services business has been sold to CSG

Receivers for Commander (ASX:CDR) have sold the embattled integrator’s managed services business to ASX-listed integrator, CSG (ASX: CSV).

According to a statement posted to the ASX today, the transaction includes Commander’s remaining Federal Government Group 8 contracts as well as its South Australian IT Panel contract, along with other managed services assets. Financial details have not been disclosed.

The deal will see 220 Commander staff transfer across to CSG. It will be completed today, subject to conditions. It does not include Commander’s Ipex business.

In a statement, CSG managing director, Denis Mackenzie, said the acquisition was part of the company’s efforts to grow long-term annuity revenue.

The deal would double the size of CSG’s managed services business and drive its presence in the Canberra and South Australian markets, he said.

Mackenzie estimated Commander’s contracts were worth $60 million annually.

“We are excited by the opportunity this acquisition brings to renewing long-term contracts with seven Federal Government agencies in Canberra and the ability to bid for South Australian Government agency business under the existing panel contract,” he said. “While this is not guaranteed, the risk to CSG is low given the accelerated cash return of the upfront purchase price.”

Receivers from McGrathNicol, Peter Anderson, Chris Honey and Joseph Hayes, said they were continuing to negotiate with a number of parties on the balance of Commander’s managed services business and planned to make an announcement within two weeks.

It is understood a private equity firm, backed by former Commander managing director, Adrian Coote, has put in a bid.

The receivers are also in the final stages of negotiating the sale of Commander’s telco business, including its national franchise network, the statement read.

According to ARN sources, the potential buyer’s list is down to two bids from Optus and Telstra.

“We are very pleased with this announcement in relation to the first stage of our sale process, as it provides an excellent outcome for all stakeholders including employees and customers,” Anderson said in the statement.

McGrathNicol was appointed receivers to Commander on August 7. The firm claims to have received 150 expressions of interest since it opened up the sale process three months ago.

The acquisition is CSG’s second in recent weeks. The NT-based company acquired Oracle specialist and ISV, CingleVue, to also grow its annuity business.

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