UXC acquires to boost SAP services

The deal -- a mix of cash and equity -- is expected to see around 140 SAP consultants transfer to UXC. On completion of the deal, expected by 31 January, Oxygen is to become an autonomous unit within UXC's business solutions group, according to a statement from the acquirer.

As part of the arrangements, UXC will supply SAP services to CHH until the end of 2010.

Oxygen claims annual revenues of AU$25 million for the 2005 financial year and expects that to grow by AU$5 million in financial year 2006.

The unit claims 200 listed customers in Australia, and with operations in New Zealand, counts among its customer base large corporates such as BHP Billiton, Cadbury Schweppes, Fonterra, Komatsu, Orica and Television New Zealand.

"The high quality customer base that Oxygen has developed is complementary to our existing installed customer base, and this brings opportunities to both Oxygen and other UXC business units," said UXC executive chairman Geoff Lord.

Oxygen chief executive officer, Mike T. Smith, will report to the group's boss, Cris Nicolli.

UXC said it would offer employment to all Oxygen staff included in the deal.

The purchase is the first in UXC's AU$20 million investment program to acquire technology companies in the Asia Pacific region.

"UXC's strategy is to invest in companies that have proven skills in specific technology markets and are leaders in their field," said Lord.

"The acquisition of Oxygen complements UXC's existing strengths in the Microsoft Business Solutions and Oracle markets," he said.

UXC executives estimate the SAP market in the two countries to be worth AU$700 million.

UXC yesterday announced an AU$6 million contract to develop a new parliamentary entitlements system for the federal Department of Finance and Administration.