blog Australian tier two IT services outfit ASG has raised a few eyebrows over the past few months through its admissions that it’s currently being targeted by a mystery buyer. There’s been relatively few acquisitions in this section of Australia’s technology sector in recent years, with industry titans such as IBM, HP, Unisys and CSC broadly believed to not be interested in buying local players and even acquisitive companies such as Fujitsu being broadly quiet in the area. This has left most speculation focused on mergers between mid-tier players such as SMS Management & Technology, Oakton, UXC and ASG. This morning ASG confirmed it was still being targeted. The company’s media release is here (PDF); it states:
Non-Binding and Conditional Proposal
ASG refers to its announcements of 18 October 2012 and 14 February 2013 where ASG informed the market that it had received an indicative, non-binding and conditional proposal from a significant participant in the IT services market to acquire ASG, and that discussions with that party were continuing. After the close of the market on Friday 15 March 2013, ASG received a further non-binding and conditional proposal from that party to acquire ASG at an indicative cash price of $0.68 per ASG share. The proposal is subject to a number of conditions including further confirmatory due diligence. ASG is currently reviewing the proposal in conjunction with its advisers and recommends that shareholders take no action until such time as ASG updates the market as to the outcome of this review.
Other Acquisition Discussions
As noted in ASG’s announcement of 14 February 2013, following enquiries from a number of other organizations, ASG has, together with its advisers, engaged in discussions with these parties regarding alternative proposals. At the date of this announcement, these discussions are continuing in various forms, however there is no guarantee that there will be a binding proposal that can be put to shareholders from any party.
For my money, I’d be betting that either a major global player such as Fujitsu or CSC (both of which have made acquisitions in the Australian market recently) or a mid-tier local player such as SMS or Oakton is going after ASG. It’s possible that it could be a telco with IT services ambitions, but I consider it unlikely at this point.