Volante out of Gen-i chase: telcos still battle for integrator

Volante out of Gen-i chase: telcos still battle for integrator

Australian IT services, the Volante Group, has declared itself out of the running in the chase for Kiwi systems integrator Gen-i.

Both Computerworld NZ and the Sydney Morning Herald had identified Melbourne-based Volante as a potential suitor for the Eric Watson-owned company, along with Telecom NZ and TelstraClear.

Gen-i employs around 50 people in Australia, generating revenues of around $10-20 million, specialising in Citrix and Microsoft systems, and also content management. Overall, the company employs 700 staff across its operations in New Zealand, Melbourne and Sydney and has a $150 million turnover.

Volante Group managing director Allan Brackin told ARN his company had “put a bid in” for Gen-i.

Bids closed on May 21 but Volante’s own bid would not be going any further.“We are definitely out of the running,” Brackin said.

The Volante Group is currently completing its recent merger with iPex and remains on the acquisition trail, though it is not presently bidding for anyone.

“We are always looking. We have stated several times that we need to get bigger. We are already competitive with the international firms and we are trying to get more competitive,” Brackin added.

Computerworld NZ identified Telecom NZ and TelstraClear as the other two bidders for Gen-i. But Veritas, Datacom, IBM and HP have also been spoken of in the market as candidates.

Telecom sources told Computerworld NZ they expect their bid to be successful. If it is, Telecom Advanced Solutions will be wound into the company to take advantage of Gen-i’s Australian presence.

That would be detrimental to TelstraClear because most of Gen-i’s large outsourcing customers use TelstraClear. Telecom NZ formally says it doesn’t comment on market rumours. Gen-i, in both Australia and New Zealand, also revealed little about the proposed sale.

Gen-i’s owner, Eric Watson, is understood to be keen to sell the company as he cashes up to service his UK business. Watson is something of a celebrity entrepreneur in New Zealand, owning assets as diverse as the Auckland Warriors rugby club and Bendon underwear.

Gen-i’s Australian CEO Tim Ward called the takeover speculation “a double-edged sword," saying it placed some uncertainty over the business. However, the strong interest shown from prospective bidders indicated the company is doing something right, he said.

Ward, a former chief executive of Hitachi Data Systems, took up his role at Gen-i five months ago and says he has been busy building up the Australian business. Partners include Microsoft, Citrix, Wise, Novell, Toshiba, HP and AMC. Gen-i also works with distributors Alstom, Tech Pacific and Express Data.

Biggs also declared the interest in Gen-i as a sign of its success. He claimed annual growth of 10 per cent a year for five years. The newer Australian division, he says, is growing twice as fast.

Gen-i’s New Zealand boss, Garth Biggs, told ARN several companies had recently performed due diligence on the business, but it was a matter for Gen-i's owners Cullen Investment to identify them.

IDC research manager Graeme Muller says it’s difficult to put a sale price on Gen-i. “It will totally depend on who’s getting it.” He dismisses as “unlikely” a price of $80 million that has been quoted elsewhere.

Around 20 per cent of Gen-i’s business is in desktop and network outsourcing, and 20 per cent in systems integration. Major customers include IAG, Air New Zealand and Fonterra.

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