Kaz Computer Services has bought Aspect Computing for $108 million plus shares, elevating it to the big boys' playground.
Kaz said in a statement that the acquisition was a key strategic move and would broaden its range of services, customer base and geographic reach.
The deal, which is based on cash of $108.8 million and the issue of 102 million Kaz shares to the vendors and staff of Aspect, will be completed in March. At this time Kaz will get Aspect's long-term government customer list and an extended application development arm.
Peter Kazacos, managing director of Kaz, said the combined business will mean the company has enormous potential to become the "largest Australian provider of outsourcing services".
Lyndsey Cattermole, joint managing director of Aspect, said: "We believe this merger creates an Australian IT services organisation which can compete strongly with the large international companies in the areas of large government and corporate IT outsourcing contracts."
Established in 1974, Aspect is one of the largest, privately owned IT organisations in Australia specialising in application development outsourcing, according to officials.
Kaz specialises in the provision of IT and business process outsourcing services.