Darwin service provider, CSG, has bought Melbourne HP specialist, Anadex, for about four times its profit before tax. Anadex has been reported as earning annual pre-tax revenue of about $1.7 million.
Anadex founder and managing director, Lance Greenwood, said Anadex, which earned 95 per cent of its earnings from HP products and services, had doubled its profit in the year ended June 30.
"We've had huge growth," he said. "Things really turned the corner for us when the HP acquisition of Peregrine settled. People had been waiting to see what happened to the products."
However, Anadex had not been up for sale, he said.
"CSG had just won a tender for the Department of Employment, Education and Training [DEET] in the Northern Territory and we partnered with them on that. So that's when they came to us and suggested a deal," he said.
Greenwood said he "was always happy to listen" and CSG's persuasion powers proved effective. "Obviously, the price was right too," he said.
CSG, an ASX-listed player in infrastructure outsourcing, had seen Anadex as a way to boost its niche software services portfolio, Greenwood said.
CSG's managing director, Denis Mackenzie, was not available when ARN called but said in an ASX statement that the buy would give it economies-of-scale as well.
"It further increases our competitiveness in outsourcing tenders and allows us to offer helpdesk and management tool sets to the entire CSG customer base across WA, the Northern Territory and Queensland," Mackenzie said.
CSG saw Anadex as an Australian leader in the sale of HP ServiceCenter (ITIL/Service Desk), HP AssetCenter and related HP Software tool sets, the statement said.
Anadex customers have included AXA Australia, the Coles Group, HP, Unisys and the Department of Defence.
Greenwood said the recent rapid pace of HP acquisitions had helped Anadex broaden and strengthen its skills and customer base.
CSG's buy of Perth-based Power Business Systems, a Microsoft CRM specialist, was one example.
"And CSG itself will be a large customer for us. Every new deal they make potentially needs some transformation, some business tools," Greenwood said.
Greenwood will continue to lead Anadex, as business unit manager, and is already looking to recruit fresh talent.
"I'm looking for additional technical resources - one or two immediately - and we're after more in processes/consultancy as well," he said.
ABN AMRO Morgans analyst, Nick Harris, said the acquisition would give CSG expertise that's in strong demand in both government and private sector organisations. "A lot of IT departments are moving towards ITIL," he said.
ITIL was a growing area in line with global demands for greater accountability, and the market was taking off in Australia, Harris said.