ASX-listed services provider, SMS Management and Technology (ASX: SMX), has purchased Oracle/Siebel specialist, Bright Blue Solutions, for $6.7 million.
According to an ASX statement, the deal should add $9m in revenue and $2m pre-tax profit annually. SMS is picking up Bright Blue’s 37 consultants across NSW and Victoria, along with its managing director, Lachlan Hanly, who will now head up SMS’s new CRM practice.
Bright Blue’s co-owners, Matthew Yoon and David Wong, will also join the division.
In the statement, SMS CEO, Tom Stianos, said Bright Blue provided established capabilities in the CRM and sales force automation markets, and would make his company the largest specialist provider of Siebel expertise nationally.
Bright Blue specialises in Oracle Siebel CRM and Business Intelligence product lines.
SMS media relations manager, Matthew Kaufman, said the $6.7m purchase price involved 70 per cent cash, and 30 per cent shares, with two-thirds spread over the next two years. It was also subject to meeting performance targets. Bright Blue is expected to be integrated into SMS over the next three months.
“It’s a brand new practice for us – we were doing some CRM work before, but this quality organisation gives us the deep expertise we wanted in the Oracle suite specifically,” Kaufman said. “It’s a nice niche for us to be in.”
While Bright Blue’s enterprise client base was similar, it did open up opportunities in the retail sector, an industry vertical SMS hadn’t been focused on before, Kaufman added.
Both organisations also said the acquisition gave their customers access to broader services and skill sets from an Australian-based organisation.
SMS flagged its aggressive acquisition strategy in its half-yearly financial report, released last week. The services organisation reported a 3 per cent drop in half-year revenue to $117.1m, but an 8 per cent increase in pre-tax profits to $17.7m.
Kaufman said it was in active discussions with a couple of companies and could potentially look at larger acquisitions if the opportunity arose.
Acquisitions made by SMS during 2009 included enterprise analytics specialist, Aipex, for $4.8m, subject to meeting annual revenue targets, as well as data management services provider, Pelion Group, for $1.2m in cash and shares.