ASX-listed services provider, ASG Group (ASX:ASZ), has stepped into the SAP integration space by acquiring Perth-based group, Courtland Business Solutions.
ASG CFO, Dean Lagenbach, said it was aware of Courtland’s existing capabilities in the market and initiated acquisition discussions. The purchase price has not been disclosed but will involve an equal mixture of cash and shares based on five times pre-tax earnings. These will be paid in three instalments.
In a statement, ASG said it expected Courtland would be earnings accretive from the 2011 financial year.
All 35 Courtland staff will be retained including co-company owner and managing director, Peter Lander. The business will be the foundation of a new SAP practice and sit alongside ASG’s existing Oracle unit.
“Our strategy is to increase our application managed services base,” Lagenbach said. “In the ERP space, SAP has about 60 per cent of the market, while Oracle has 40 per cent. For us, it’s a natural progression to enter that market and part of our long-term strategy.
“We just needed to be patient to find the right company with the right cultural fit and business to leverage our managed services capability.”
Lagenbach hoped to grow the SAP division’s headcount to 100-200 over the next three years, as well as expand into the east coast. As well as the desired SAP skill set, Courtland also gave ASG an opportunity to build its presence in the oil, gas and mining sector, he said.
Courtland was established in 1994. In a statement, Lander said it was pleased to be aligned with a national provider of ASG’s size and scope and cited strong opportunities to grow both businesses nationally.
The latest acquisition comes one month after ASG announced its purchase of Melbourne-based consulting firm, Downer Consulting. Lagenbach said the Courtland deal was similar in size to its previous purchases.