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Commander fire sale not a hit

Two of the fastest-growing and most acquisitive IT services companies in Australia today showed little interest in buying up all or pieces of failed rival Commander, which passed into the hands of administrators last week.
Written by Suzanne Tindal, Contributor

Two of Australia's fastest-growing and most acquisitive IT services companies today showed little interest in participating in the fire sale of their failed rival Commander, which passed into the hands of administrators last week.


Geoff Lewis
(Credit: ASG Group)

ASG Group, which has its headquarters in Perth, expects to grow earnings 43.6 per cent in the year to 30 June 2008 and has a history of acquisitions over the past few years; adding local firms Assist, Exceed and Vindaloo to its stable.

But managing director Geoff Lewis was less than enthusiastic when asked by ZDNet.com.au about the Commander fire sale this morning.

"For us the only bits that would be of interest would be the managed services," he said, referring to the Volante business Commander bought in 2006. But even those parts might not entice the executive. "When Volante was going around it looked pretty ugly then," he said.

Lewis stressed that ASG didn't resell products, pointing out a lot of Commander's managed services deals included product clauses. He said he didn't want to "corrupt" ASG's business, and unless there were pieces of Commander which were "clean" the company wouldn't consider it.

Cris Nicolli, CEO of UXC's Business Solutions Group, also played down the idea of participating in the sell-off, despite his company's prolific acquisition record, swallowing Datec Queensland and Getronics Australia this year alone.


Cris Nicolli
(Credit: UXC)

"They typically operate in the small end of the market," he said of Commander, although he did admit that the managed services contracts Volante looked after were of interest. He said UXC would look at possibilities over the next 48 hours, but wouldn't be in a rush.

"It hasn't been a priority for us," he said. "We've only just bought Getronics a couple of months ago."

Claudio Castelli, analyst at research firm Ovum, said he thought it more likely for big companies to make the move, either from within Australia or an international company looking to get a footprint in the Australian market. The largest IT services firms operating locally are IBM, CSC, Hewlett-Packard and EDS.

Any purchase would need investment, and larger firms would have more funds on hand in the current market, he said. "They have more power to go out and spend this kind of money."

Optus could be another potential acquirer. The SingTel subsidiary has diversified with the acquisition of IT services firm Alphawest and fibre specialist Uecomm in recent years, and was consistently linked by newspaper reports with interest in buying telco PowerTel, before Telecom New Zealand picked up the firm. An Optus spokesperson today declined to comment on the Commander issue.

SMS Management & Technology bought IT-consulting company Total Learn in October last year, which is based in Canberra where much of Commander's business has come from. The company, however, also turned down requests for comment.

Gen-i recently reordered itself to focus more on managed ICT Services and could also be interested in parts of Commander. A spokesperson for the company said Gen-i was looking at opportunities as they presented themselves, however the spokesperson could not say if it was looking at Commander in particular. Chris Quin, CEO of Gen-i Australasia was unavailable for comment.

Other potential candidates include the Australian arm of Japanese IT services giant Fujitsu, which has been persistently linked with Telstra's attempts to sell its IT services arm Kaz. Today, Fujitsu Australia chief Rod Vawdrey declined to comment on whether his firm would take a look at Commander.

Some other firms which have recently made similar IT acquisitions in the Australian market include Northern Territory-based firm CSG and Melbourne-based DWS Advanced Business Solutions.

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