SMS chief to step down after ASG merger
- 30 October, 2017 11:50
SMS Management & Technology CEO, Rick Rostolis, is set to step down from his role following the acquisition of the company by ASG Group and the subsequent integration of the two businesses.
According to sources, Rostolis will finish up in his role with the post-merged entity at the end of January next year.
The move comes after initial post-merger plans that were expected to see Rostolis hold an ongoing role with the integrated businesses, likely in corporate activities.
Now, however, sources maintain that he will formally finish up with the company in or about January 2018.
ARN understands that Rostolis will, for the time being, consult to the leadership and senior executive teams of the merged businesses on various issues.
The impending departure comes after more than seven years at SMS, which Rostolis first joined as chief financial officer (CFO) after coming across from BlueAnt Wireless, where he was chief operating officer (COO).
Rostolis stepped into the CEO role in May 2016, replacing former CEO, Jacqueline Korhonen, who resigned from her role after just over a year in the top job.
As CEO of SMS, Rostolis played a major role in steering SMS through the process of its sale to ASG, and has been closely involved in the work to integrate the two businesses.
ASG Group completed its $124 million acquisition of the then publicly-listed SMS Management & Technology late September.
The acquisition came after a drawn out bidding war between fellow publicly-listed Australian IT services player, DWS (ASX:DWS) and ASG Group, which is owned by the Japanese company Nomura Research Institute (NRI).
Following the completion of the acquisition, SMS and ASG began the process of being integrated into a single operating business, a process that should take three months and that will be led by recently appointed head of operations, Andrew Rose.
Now, as the two businesses move through the integration process, it is understood that the merged entity, under the leadership of ASG Group CEO, Geoff Lewis, will look to organic growth opportunities, rather than further growth through more acquisitions.
With the integration now underway, a formal launch of the combined entity’s new ASG branding and marketing plan is expected to be revealed in the coming months.
In August, prior to the completion of the acquisition deal by ASG, SMS posted a $42.1 million net loss for the financial year of 2017 ended on 30 June.
This was of the back of total revenue for FY17 of $304.5 million, or seven per cent less than the previous reported year when the company’s revenue was $328.7 million.
In September, when ASG got the green light to acquire SMS, Lewis said he was not concerned about the $42.1 million net loss SMS posted for the year ending June.
“If you look at the trading for the last period, it’s certainly stabilised, and operationally, it’s going okay,” Lewis told ARN at the time. “And we certainly see a lot of opportunity in the combined businesses, and…the two businesses together will position us as a $500 million-revenue, 2000-people organisation."
Rostolis had not responded to ARN’s queries at the time of writing.