IT services provider ASG Group has purchased Sydney and Melbourne-based SAP Services provider Progress Pacific in a $12 million cash and scrip deal.
IT services provider ASG Group has purchased Sydney and Melbourne-based SAP Services provider Progress Pacific in a $12 million cash and scrip deal.
In a statement to the Australian Securities Exchange ASG said Progress Pacific has a blue chip client base including Broadcast Australia, Device Technologies, Fresenius Medical Care, George Weston Foods, IAG, ING, Kimberly-Clark, Pepsico and Smiths.
The purchase price is based on a multiple of five times average earnings before interest and tax for the 2011 and 2012 financial years.
It is subject to Progress Pacific meeting certain performance benchmarks.
ASG said the $12 million will be paid in the form of 50 per cent cash and 50 per cent scrip across two installments, 25 per cent up front and the outstanding 75 per cent to be paid in September 2012.
ASG general manager sales and delivery Murray Rosa said the acquisition sees ASG expanding its SAP presence in key growth markets on the east coast where there is an opportunity to leverage its existing deep customer relationships and IT infrastructure.
"Progress Pacific, together with the recently acquired Courtland Business Solutions in WA, sets the spring board for ASG to grow its SAP business throughout Australia," said Mr Rosa.
"These acquisitions, combined with our core capabilities, enable ASG to reach the market with various SAP offerings, including being one of the first accredited SAP Partners for SAP SaaS.
"We have already witnessed the benefits of working with our other recent SAP acquisition, Courtland, to capture market opportunities and we anticipate the same success with Progress Pacific."
See company statement below:
IT services provider ASG Group (ASX: ASZ) is pleased to announce it has acquired Progress Pacific, further expanding its capabilities and footprint in the SAP space.
Progress Pacific is a Sydney and Melbourne based SAP Services provider that has strong client relationships across a range of industries.
A highly successful SAP consulting company with 40 plus employees in Sydney and Melbourne, Progress Pacific's blue chip client base includes Broadcast Australia, Device Technologies, Fresenius Medical Care, George Weston Foods, IAG, ING, Kimberly-Clark, Pepsico and Smiths.
The total purchase price is based on a multiple of five times average earnings before interest and tax (EBIT) for the 2011 and 2012 financial years, capped at $12 million.
The purchase price is subject to Progress Pacific meeting certain performance benchmarks over time, which will ensure the acquisition remains earnings per share accretive for ASG.
Consideration, in the form of 50% cash and 50% scrip, is payable across two instalments - 25% up front and the outstanding 75% to be paid in September 2012.
The first scrip component will be issued at $1.25 and the second component will be calculated on a 20 day Volume Weighted Average Price period prior to payment date. The cash component will be funded by a combination of existing cash reserves and debt.
ASG General Manager Sales and Delivery, Murray Rosa, said the acquisition sees ASG expanding its SAP presence in key growth markets on the east coast where there is an opportunity to leverage its existing deep customer relationships and IT infrastructure.
"Progress Pacific, together with the recently acquired Courtland Business Solutions in WA, sets the spring board for ASG to grow its SAP business throughout Australia," said Mr Rosa.
"These acquisitions, combined with our core capabilities, enable ASG to reach the market with various SAP offerings, including being one of the first accredited SAP Partners for SAP SaaS.
"We have already witnessed the benefits of working with our other recent SAP acquisition, Courtland, to capture market opportunities and we anticipate the same success with Progress Pacific."
