The first piece of beleaguered integration giant, Commander, has been sold-off to ASX-listed provider, CSG.
The Northern Territory-based integrator has acquired Commander’s managed services business including its Federal Government Group 8 and South Australia IT panel contracts. Financial details have not been disclosed.
The deal will see 220 Commander staff transfer across to CSG to work alongside its 300 existing managed services employees. The deal does not encompass Commander’s Ipex hardware business, raising questions about the PC assembler’s future.
CSG managing director, Denis Mackenzie, said the acquisition was part of its efforts to grow longterm annuity revenue.
The deal will double the size of CSG’s managed services business and drive its presence in the Canberra and South Australian markets, he said.
Commander’s contracts are estimated at $60 million annually. CSG has about $40 million in annual managed services revenue.
“We’re looking to grow the business into WA. This opportunity gives us a presence in Canberra and SA,” Mackenzie told ARN. “We have not taken on the physical hardware deals in SA – we have only bought the managed services business as we’re not a hardware provider. We have bought some Canberra contracts that were in Ipex’s name but only the managed services.”
Although CSG has picked up a variety of Commander contracts, a major challenge will be retaining Commander’s Federal Government deals, many of which expire in June next year. Its lucrative Group 8 outsourcing arrangement, which has been in place since 2000, has begun to split up following the Department of Agriculture, Fisheries and Forestry’s decision to put its IT services up for tender in July.
“We see incumbency matters – we have employed all the staff related to managed services that have a good relationship and delivered good services in the past,” Mackenzie said. “We hope to retain customers.”
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.
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.