NEC acquires CSG’s Technology Solutions business

NEC Australia has signed an agreement with IT services firm, CSG (ASX: CSV), to acquire CSG’s Technology Solutions business for $227.5 million as part of NEC’s five-year strategy to be a major player in the Australian IT services market.

The Technology Solutions division, comprising CSG Services and CSG Solutions, offers managed services and strategic consulting in a number of states including Western Australia, New South Wales and Victoria.

NEC Australia managing director, Alan Hyde, told Computerworld Australia that the acquisition, once complete, would push its annual Australian revenue to over $400 million and staff numbers from 700 to 1550 employees.

“We have what I refer to as a communication centric business but in order to be a top five IT services player we have to significantly grow our services capability,” he said.

“The verticals we will be expanding into are financial services, mining, state and federal government, policing, defence, health and education. Both NEC and CSG have capabilities in education/health which have now been greatly expanded.”

According to Hyde, no redundancies were planned from the 850-strong CSG Technology Solutions work force.

“A key driver of this was to bring on a highly skilled work force and strong management team,” he said.

Following the completion of approvals for the sale, the Technology Solutions business will operate as an independent business unit of NEC Australia. However, the group will be eventually re-branded as NEC as the company did not acquire the rights to use the CSG name.

CSG was the subject of a non-binding off-market acquisition offer in September 2011 followed by another offer of $340 million from an unnamed bidder in October that year. However, it did not proceed with either bid as according to CSG secretary, Jim Clark, the transactions were not in the best interest of shareholders.

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