First major SA management consulting group to internationalise; UK office to follow acquisition of Australian consulting practice as firm targets expansion into Europe, USA and South East Asian markets by December 2001
The new management consultancy formed by JSE-listed IT group AST is finalising its assault on lucrative markets currently dominated by big names in consulting such as McKinsey, Bain and Andersen/Accenture.
In a R115-million deal, AST recently pulled together GEM of Australia and its own consulting division Bentley West. The new firm will be known as Gem Bentley West. This week the Australian and South African executives met to finalise the merger and their plans to jointly enter highly competitive markets.
The new consulting practice will have revenues in excess of R150-million and more than 100 professional consultants. With revenue growth targeted firmly in the 50%-plus range, Gem Bentley West joint MD Paul Aucamp expects offshore revenues to account for more than 60% of the new firm`s revenues by end of financial year 2001.
Aucamp says the firm`s five offices - in Sandton and Cape Town in South Africa, and Perth and Sydney in Australia - will provide a platform from which a global consulting firm will be built. "We are well positioned to help SA firms plot and drive their global ambitions as well as provide top class consulting to clients in new markets."
Mark Barnaba, joint MD and head of the Australian operation, says the merger provides a springboard for building a global organisation on a timetable that would not have been possible through organic growth alone.
"Critically, in this new firm there is a kindred spirit among like-minded individuals from South Africa and Australia who are aggressive and have similar goals," says Barnaba.
He says the professional services market in South East Asia and Australia alone is estimated at US$2,3-billion per annum, and Gem Bentley West is ideally positioned to track the rapid growth in the market, which is characterised by far reaching restructuring as IT groups aggressively enter the consulting arena.
"Our clients in Australia will benefit because we are now able to give them many more opportunities for international exposure and expansion. We will also use this merger as an opportunity to upgrade our combined skills base," says Barnaba.
Aucamp says plans are well advanced to open an office in London, which will give the firm a crucial foothold in northern hemisphere markets. The firm is already on the verge of sealing an engagement with a leading European airline. In addition, Aucamp anticipates opening offices in Los Angeles and Hong Kong before the end of 2001.
Aucamp says Gem Bentley West is the first major South African-owned management consulting firm to internationalise; AST is also the only South African IT company to own a significant strategic management consultancy.
This positions the group to compete internationally with similarly structured IT/management consulting firms. The merger offers benefits to clients in both Australia and South Africa. Both practices specialise in strategy and are strong in mining, manufacturing and financial services. Aucamp says South African clients will benefit from additional corporate finance expertise resident in Australia, which gives the firm a unique position in the consulting market. Australian clients will benefit from the strategic IT capabilities in South Africa.
Gem Bentley West provides clients with a range of key services in the strategy and consulting fields. The firm particularly specialises in high impact, high delivery engagements that create new business opportunities and increase profits for clients.
Significant engagements include:
The strategy development for a major B2B eCommerce development;
Strategic repositioning of a major manufacturere;
A joint venture and technology partnership arrangement with a major online retailer;
Restructuring of a major industrial conglomerate;
Strategy development for a fourth party logistics services supplier;
E-Commerce strategy for a major bank;
Business intelligence for a major short-term insurer.
Gem Bentley West serves seven of Australia`s top 30 listed companies and ten of South Africa`s top 100 listed companies. Key clients in South Africa include:
Anglogold;
Iscor;
De Beers;
Standard Bank;
Santam; and
Absa.
Barnaba says the merger will enhance the range of services in Australia, particularly in areas around information technology. Major clients in Australia include:
Woodside, the country`s Australia`s largest natural gas producer;
Ansett, Australia`s second largest airline company;
Land Lease, a major property and construction group; and
Goodman Fielder, a major food manufacturer.
The AST Group recently announced that in terms of the deal it had acquired 100% of Gem Consulting for an initial payment of R115-million, to be followed by four tranches of R8,8-million subject to profit warranties. Gem Consulting includes Poynton & Partners, which provides corporate advisory services.
While Gem Bentley West`s growth and internationalisation mirrors that of its holding company, the AST Group, Aucamp is confident that the consulting practice will, in future, spearhead the group`s global expansion in target markets.
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