Services specialist Logica has purchased the ERP solutions business of Brisbane-based eGlobal for $6.5 million.
The ERP business, named eGlobal Pacific, is one of the largest implementers of the software of German-based SAP in Australia. It formed the largest part of ASX-listed eGlobal's business, while the rest of the business was dedicated to the development of smart card, e-business software and IT security solutions.
On a worldwide basis, Logica is one of SAP's top five partners and the services company has implemented around 400 SAP systems around the globe. But Logica's SAP business in Australia was "almost negligible", said local executive director Geoff Cosgriff. Previously, any implementation that involved SAP would normally involve Logica Australia bringing in one of the company's SAP experts from overseas or partnering with a local SAP implementation specialist.
"Logica's strategy is to have expertise in best-of-breed solutions and be completely product-independent," Cosgriff said. "Acquiring a local SAP business has been on our to-do list for a couple of years, we were just waiting for the right deal to come along."
Cosgriff said there were plenty of opportunities for cross-selling services between Logica's existing customer base and customers of eGlobal Pacific. The 65 staff at eGlobal Pacific will move across to Logica, whose IT professional headcount will now exceed 750 in Australia.
It is not the first large acquisition for the UK-based services group in Australia. In late 2000, Logica paid a whopping $85 million to buy the MITS division of Utility Services Corporation. The deal saw 550 staff transfer from USC to Logica and gave the local office a strong foothold in the utilities sector.