The AST Group has acquired Australian systems integrator Red Rock Consulting for $A13.3 million (R58.3 million).
The nominal value of the deal, which is in line with the group`s intention to build an integrated IT services and solutions business in Australia along the lines of its South African business, is based on projected future growth rates of 30%.
Red Rock is an IT services company which provides a range of system integration services with a focus on Oracle development, implementation and support services.
It has a staff of 70 and has offices in Sydney, Melbourne and Canberra. Customers include Vodafone, Toshiba, Coca-Cola and various government bodies.
AST executive chairman Gerrie de Klerk says the purchase price will be paid in cash, to be funded from South African resources.
He expects the acquisition to have a positive effect on the group`s headline earnings per share for the year to 30 June 2002.
De Klerk says its strategy is to use well-considered acquisitions to establish the capacity to provide end-to-end IT services and solutions in Australasia.
The first step in this strategy was the 1999 acquisition of an enterprise systems management and utilities software implementation company, followed by the establishment of a resource placement business the same year.
Last year the group bought management consulting practice GEM Consulting.
"The first two acquisitions have proven to be very good investments in their own right, as will be the case with Red Rock Consulting," says De Klerk.
"But it is the additional synergy that I find most exciting. Not only are we exploiting complementary capabilities between AST`s Australian business and their counterparts in SA, but together, our Australian companies are beginning to resemble the synergistic array of businesses that we have in SA."
The group is committed to achieving a $A100 million turnover business by December next year.
"The experience of the AST Group in Australia since 1999 has been successful," he adds. "The product and GEM Consulting business units have increased the group`s customer base in the region while delivering on profit expectations."
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