GEM restructures ahead of buy out

Newly-rebadged Perth management consulting and corporate advisory company GEM Consulting is understood to be negotiating a multi-million dollar deal to buy back a majority stake in the company from the South African AST Group.

Ahead of the buy back, GEM announced a major restructure that included the integration of the corporate advisory business operated under the Poynton and Partners banner with the management consulting work undertaken by GEM.

Poynton and Partners and sister company GEM were established in 1996 and sold to the South African technology group for more than $40 million in 2000.

Back then, and since, the Poynton/ GEM coupling, which combined a merchant bank with management consult-ing and private equity, was considered unusual by many in the market.

Also questioned was the involvement of AST, one of South Africa’s largest IT solutions and infrastructure companies, with more than 3,500 employees.

Prominent Perth businessmen, John Poynton, Mark Barnaba and Geoff Rasmussen, left Poynton and Partners to form Azure Capital in July last year after four, sometimes turbulent, years under South African ownership.

GEM joint managing director Darren Smith declined to comment on the buy back, though WA Business News expects there will be an announcement soon.

Besides the demise of the Poynton and Partners name, GEM has launched a new mining and resources practice, and appointed a new director and equity partner in ex Bain and Co manager, Stuart Love.

Mr Smith said GEM’s management consulting work, including perfor-mance improvement and growth strategy development for such clients as BHP Billiton, Fortescue Metals Group and Alinta, accounted for 70 per cent of the business.

“Much of the firm’s success has been built on its ability to integrate the capabilities and experience developed in these two businesses and their 15 staff into all of its operations. The full integration of these businesses was a logical next step in developing our business and services,” he said.

GEM also found the two-brand approach confusing and diluted the firm’s marketing efforts, so the Poynton name was consigned to history. A new logo has been released to support the move.

GEM’s new mining and resources practice, to be headed by Mr Smith, will complement the company’s traditional strengths in utilities, services and manufacturing, led by joint managing director Robert Radley.

“We have recently completed major projects in iron ore, gold, other precious metals, alumna, copper and nickel in WA, Colombia, Chile, the US and Mozambique,” Mr Smith said.

“Separating our industry efforts into these two practices will reinforce our intellectual property development, staff development and business development activities, and allow us to better serve clients in each of these two industry groups.”