CSC abandons $150m reseller group sale to NetOptions

Consultancy and system integrator CSC has declined Australian rival NetOptions' offer to buy the former's reseller group after several months of negotiations.

Eilish Doherty, a spokeswoman for CSC Australia, confirmed yesterday, 9 March, that NetOptions offer had not been accepted, after some three months of negotiations and rumours in the channel.
'Today we have withdrawn from the deal. CSC has decided not to proceed with the deal,' Doherty said.

She said CSC would retain its product group's IT reseller activities as part of another operation.

CSC said in November that it was investigating a sale of its reseller operations to NetOptions. It is understood that the acquisition would have been a contract coup for NetOptions.

It has been reported that those operations made $150 million a year for that company - but that revenue from PC reseller and recruitment activities had fallen 10 to 12 percent last year.

However, both companies were bound by a non-disclosure agreement so no further comment was possible, Doherty said.

Greg Thiele, Queensland state manager at NetOptions, was contacted for comment but claimed not to know anything about the deal. The only person able to comment was MD Richard McAlary, who was inter-state and thus not available, Thiele said.

Both companies have long-standing partnerships with major software and hardware vendors including Siebel, BEA, IBM, Oracle, PeopleSoft, Microsoft and Toshiba.

A global company, CSC specialises in outsourcing deals with large enterprises and government departments.

NetOptions - which has offices in Brisbane and Melbourne and more than 1,000 staff -- is known mainly for network installations and national roll-outs.

CSC hit the news most recently when it won a $20 million, three-year IT infrastructure contract with Xstrata Queensland, a subsidiary of Anglo-Swiss mining giant Xstrata.

The deal covers Xstrata Australia's Brisbane head office and industrial complexes at Mt Isa, Ernst Henry, Townsville, McArthur River, Ravenswood and Oaky Creek.

CSC in February won a five-year, $50 million contract to provide desktop and server hardware, application and network management services to the Western Australia Police Service.

Under the five-year program, 60 CSC staff will manage more than 244 Windows, 48 Unix servers and some 4,000 desktops. CSC will also provide a Network Management Centre to manage the communications network and mainframe.