ASG chief executive Geoff Lewis (Credit: ASG)
ASG chief executive Geoff Lewis said in a statement that his company had pursued a deliberate strategy of boosting its skills in certain high-value areas. "We set out to build our capabilities in business intelligence, SAP and consulting — and we've now delivered on this," he said.
"At the same time, we've invested heavily in our next wave of contract growth, with major wins in recent months with customers such as the Department of Prime Minister and Cabinet, Western Power and the Western Australian Department of Education," he added.
ASG and Capiotech currently work alongside each other in at least one company — Qantas — and Lewis said the acquisition represented a "natural progression" in that working relationship. "We expect a number of ASG's existing clients will be attracted to the enhanced service offering and capabilities that this acquisition delivers," he said.
Capiotech's client base also includes ANZ Bank, Commonwealth Bank, Macquarie Group, NAB, Vodafone, Origin Energy, CSL and the Queensland Department of Transport and Main Roads.
The purchase price is expected to be $30 million and is based on a multiple of five times average earnings before interest and tax (EBIT) for the 2011 and 2012 financial years. It will be paid in a combination of cash and scrip in three instalments though August 2012.
ASG has also recently acquired two other companies — IT consulting group Dowling Consulting and SAP specialist Courtland Business Solutions. The Capiotech buy is expected to deliver underlying earnings per share accretion of 15 per cent in the 2011 financial year, said ASG's statement. Lewis also noted ASG had already won $112 million in new contracts since January 2010.
The news today produced a modest recovery in ASG's share price, which had spiked downwards along with other IT services companies over recent weeks.