Consulting, technology and outsourcing services group, Capgemini Australia, has bought up Australian software testing company, Nu Solutions, in a multi-million dollar deal designed to bolster Capgemini’s position in the managed testing services market.
A subsidiary of the Capgemini Group worldwide, Capgemini Australia will take on Nu Solutions’ client base in the financial services sector and reinforce its growing links with the Australian Government.
"We already have about six clients within the partnership," said Capgemini Australia’s chief executive officer, Paul Thorley. "The deal will add just over 10 per cent to our revenue line."
Clients include CBA, Macquarie, NAB, AMP, Goldman Sachs, Telstra, Optus, RTA and Sydney Water.
Nu Solutions’ 75 testing consultants in the company’s Sydney and Melbourne offices will be absorbed into Capgemini Australia to form a dedicated division branded Capgemini Testing Services.
Thorley said there wouldn't be any retrenchments. In fact, the headcount will soon increase to 80 as the company looks to recruit on the back of strong demand for testing services.
The acquisition means Capgemini will have more than 750 staff supporting its Australian operations and client base, 500 of whom are based in Australia and others in Rightshore locations, including India. Rightshore is Capgemini's global delivery model, which aims to balance talent across multiple locations worldwide, allowing organisations to use local testing expertise and combine it with offshore talent.
"The testing landscape will really change as a result of this deal," said Nu Solutions chairman, Eli Shellim. "Customers want to reduce the cost of testing but they don't always like the idea of going offshore. But if an organisation wants to create a Centre of Excellence within a short timeframe, we can fly in somebody from overseas as required."
Shellim said Nu Solutions will effectively manage the testing division of Capgemini in Australia.
The two companies have worked together on several projects over the past two years and have been in talks for almost six months to get the deal over the line.
The global testing market is estimated to be worth $US38 billion by 2012, according to analyst Nelson Hall. Capgemini has more than 7000 testing specialists worldwide, making it one of the largest software testing practices and the group is keen to expand its Australian presence.
Thorley said there was increasing recognition among Australian businesses about the importance of strategic software testing for mission-critical applications.
"The market has really shifted," he said. "In the last three to four months, we have been growing."