Perth-based IT services provider ASG Group Ltd will expand its presence in the Queensland market with a $3 million acquisition of A-DB Group.
Perth-based IT services provider ASG Group Ltd will expand its presence in the Queensland market with a $3 million acquisition of A-DB Group.
The acquisition of A-DB, which has offices in Brisbane and Adelaide, establishes ASG in every mainland capital city and also launches it in the defence sector.
Consideration for the acquisition is $3 million, consisting of 30 per cent cash and 70 per cent ASG shares at an issue price of $1.20 each.
Below is the full announcement:
IT services provider ASG Group Limited (ASX: ASZ) is pleased to announce the acquisition of Brisbane-based A-DB Group.
The acquisition significantly enhances ASG's presence in the burgeoning Queensland market and provides the group with its first on-ground presence in the growing South Australian market.
ASG now has a truly national network with offices in every mainland capital city and in Canberra.
The acquisition also gives an opportunity to launch ASG in the defence sector where A-DB has an established presence.
Consideration for the acquisition is $3 million, comprising 30% in cash and 70% in ASG shares at an issue price of $1.20 a share. The purchase price represents a forecast FY09 EBIT multiple of 3 times.
ASG Managing Director Geoff Lewis said the acquisition was part of the Company's strategy of building capability and national reach through organic growth and targeted acquisitions that are earnings per share accretive.
"A-DB is a strong, established business with an outstanding portfolio of clients, many of whom are long-term customers," said Mr Lewis.
"It also has a great blend of government and blue-chip corporate clients, with presence in education, health, defence and financial services.
"We believe the acquisition will provide ASG with a great additional customer base and a springboard to build a substantial market share in Queensland and South Australia."
A-DB has operated in Brisbane since 1997 and in Adelaide since 1983. It employs 55 staff and had annual revenue of approximately $6 million in FY2007.
Key services offered by A-DB include:
- Oracle and Microsoft database administration
- Application Development - Oracle, Java, .NET, SOA
- Defence systems consulting and support
- Specialist IT recruitment
- Certified Oracle, SUN and HP education
- Oracle Software licensing.
The addition of A-DB will also allow ASG to capture synergies and scale benefits, with the planned immediate integration of the business into ASG's national network.
Existing clients include Queensland Health, Queensland Rail, BAE Systems, Santos and Bond University.
The A-DB operation will also assist ASG in serving existing Queensland-based clients such as Virgin Blue.
ASG believes A-DB will provide a strong platform from which the Company can pursue numerous additional contract opportunities in both Queensland and South Australia.
