ASG acquires SAP partner Courtland

IT services provider ASG Group (ASX:ASZ) has acquired Western Australian SAP software provider Courtland Business Solutions.  

The acquisition will see ASG enter the SAP market for the first time.

It will also increase its mainly Oracle offering to the resources and energy sectors, "which was traditionally an SAP market," Dean Langenbach, CFO of ASG told CRN.  

Courtland has client relationships across a number of industries that include mining, oil and gas, engineering, construction and infrastructure.  

Langenbach said the decision to acquire to Courtland stems back to ASG's long term strategy to launch a managed services offering in the SAP space. 

"It's been planned for a number of years," he said. 

ASG CEO Geoff Lewis said the deal will set the platform for ASG's next phase of growth.  

"On completion of this acquisition, ASG will have a complete product offering, allowing us to further reinforce our position across all Australian markets as the preferred, high quality, low risk, fully integrated IT services provider," he said.  

Langenbach said staff would be retained and the intention is for them to "grow". Courtland managing director, Peter Lander will maintain his role.

ASG will continue to grow its Oracle services capability alongside the SAP business and will maintain separate Oracle and SAP practices, the company said.  

The total purchase price is based on a multiple of five times earnings before interest and tax (EBIT) which was not disclosed.

The purchase will consist of 50 percent scrip and 50 percent cash payable in three instalments, with the first instalment payable on completion representing 50 percent of the total expected acquisition cost.  

The purchase price is subject to Courtland meeting certain performance benchmarks over time, which will ensure the acquisition remains earnings per share accretive for ASG.

SAP today published its first-quarter results for 2010, showing a doubling of profit since last year.