When GE Money acquired AGC from Westpac in 2002, the CIOs of both companies joined forces to carry out one of Australia's largest corporate integration projects.
GE Money is more than just the finance arm of General Electric, the US industrial giant famous for making everything from aircraft engines to washing machines. GE Money is also the world's biggest non-bank financial institution. GE Money is also a very, very hungry company.
How hungry? Since arriving in Australia in 1995, GE Money has gone from no presence here to around $30 billion in assets, doubling in size about every two years. In 1998 GE Money doubled when it acquired Nissan's automotive finance business, then one of the market's top finance companies. A year later the company doubled again when it bought AVCO's financial services business. And in 2002 it doubled again, this time purchasing Westpac's consumer finance business, Australian Guarantee Corporation (AGC), for $1.65 billion. Most recently, GE Money acquired Australian Financial Investments Group, which includes the Wizard mortgage business. GE Money's AFIG purchase took its assets from just under $12 billion to close to $30 billion, making GE Money the largest non-bank financial services company in the country.
But before you get too envious of GE Money's growth rate, spare a thought for CIO Chris Felstead, whose job is to make sure that the companies acquired by GE Money - as well as all of their client data and essential IT applications - are integrated smoothly into the GE Money enterprise. "The organization has grown rapidly and we [GE's IT shop] have been sort of dragged along by this rapid growth agenda that we have," says Felstead, who has been CIO of GE Money since the company purchased Coles Myer's private label credit card arm in 1995.
When you are CIO of a company that targets between 50 and 100 other businesses for acquisition each year, good project management skills are a given. Nevertheless Felstead's talents were put to the test when GE acquired AGC from Westpac. Fortunately for Felstead, he had the help of Westpac CIO Simon McNamara to combine the two companies' commercial finance portfolios. Starting in May 2002, the pair embarked upon a two-year odyssey to surgically excise AGC's systems and data from Westpac as a whole and integrate them with GE Money's rapidly growing business.
Growth by Acquisition
Starting out in Australia under the banner of GE Capital (the name change to GE Money came last November), GE Money deals mainly with business-to-business financing. In Australia the company provides payment cards for Coles Myer, point-of-sale finance for retailers like Harvey Norman and car loans for big dealerships.
In July 2001 GE Money first approached Westpac to discuss the purchase of that bank's consumer finance division, AGC, in Australia and New Zealand. At the time, AGC was responsible for approximately 35 percent of Australia's non-bank consumer finance market.
"We took the normal process," Felstead says. "We approached Westpac and permission for due diligence was granted. GE put a team together and we performed due diligence on AGC.
"We're an acquisition-focused organization, so we have a very well-defined due diligence mode. There's a template for due diligence that's in place before we go in and start pulling things apart."
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