ASX-listed Western Australian services company, ASG (Amcon Solutions Group), has moved east with the acquisition of Oracle solutions and services provider, Assist, for $4 million.
ASG has paid $2.5 million for Assist and will pay the remaining $1.5 million over two years based on Assist’s performance. As part of the transaction, ASG has inherited Assist’ intellectual property, assets and client base, which includes Federal Government and ACT, Victorian and NSW government agencies.
With offices in Canberra, Sydney, Melbourne and Brisbane, privately-owned Assist employs 41 staff. They will increase ASG Group’s combined workforce to more than 200.
The acquisition, which was first announced to the ASX in November 2003, gives ASG a leg up in to the Federal and interstate government and corporate markets.
In the past ASG and Assist have competed with one another for several tenders but have never worked as partners.
However,CEO of ASG Group, Geoff Lewis, is confident the two companies will merge successfully.
He said the opportunities for cross selling in terms of both customers and geographies were enormous.
“Assist was the right size, had the skills we were looking for and culturally were a good match," Lewis said. "The range of consulting, implementation and support services Assist offers complements ASG’s existing business and the opportunities for cross selling in terms of both customers and geographies.
ASG would also be ramping up its business development capability on the East Coast to engage the high quality client base, Lewis said.
The biggest immediate challenge for ASG would be educating Assist staff and reshaping Assist’s business to meet the requirements of being a publicly-listed company, he said.
Assist will continue to trade under its own company name and all existing Assist staff will be kept on. The new business will be headed up by Assist’s existing managing director, Cheryl Durey.
“Both client bases should benefit from the greater depth of resources and technical capabilities available from the combined organisations,” Durey said.
While growth by acquisition is integral to ASG’s eastern seaboard business moving forward, Lewis said it would continue to grow its WA business organically.
“Together with our recent organic growth successes, this acquisition will contribute to the achievement of our Prospectus forecasts," he said.
“Given the strong client base provided by Assist, there are two significant steps that we can now take. We can address a new client base with our selective outsourcing services. Then we can increase our sales and marketing expenditure to strengthen our East Coast capabilities and opportunities to capture long term outsourcing business."