Commander’s services arm bought by CSG

The acquisition includes Commander’s/Volante’s Group 8 and Department of Finance managed services contracts in Canberra.

However the buy-out doesn’t include Commander’s IPEX, hardware and telecoms business.

Denis Mackenzie, CEO at CSG, said the contracts transferring to CSG generate annual revenues of approximately $60 million.

In a statement to the ASX, Mackenzie noted that 220 staff will be added to its business. They will be primarily from Canberra, South Australia, Victoria, Queensland and the Northern Territory.

He stated that the contracts and staff – which form the bulk of this acquisition – goes to the core of its aim to grow long term contracted revenue.

“The purchase doubles the size of our managed services business and catapults CSG into the Canberra and South Australian government markets,” stated Mackenzie.

“We are excited by the opportunity to win more contracts that expire in June 2009 and CSG is confident that several of them will be renewed with the current customers.”

However there is no guarantee for CSG in renewing Commander’s contracts with seven federal agencies in Canberra and the ability to bid for South Australian Government agency business – under the existing panel contract.

“While this isn’t guaranteed, the risk to CSG is low given the accelerated cash return of the upfront purchase price,” said Mackenzie.