After over 12 months in the pipeline, Logica has finally announced its acquisition of Melbourne-based systems integrator MITS. Although the sale has yet to be approved by parent company share holders, the acquisition is clearly endorsed by the MITS board of directors.
Created 10 years ago, MITS is currently the IT arm of Utilities Services Corporation (USC), a publicly listed company which grew out of Melbourne Water. The company's services are based around service provision to utilities such as billing control, systems integration and facilities management for client/server networks.
UK-based Logica reportedly netted MITS for $85 million in a deal which will significantly boost its presence in Australia.
The deal will see Logica's staff expand by almost 500 per cent, adding 550 MITS staff to the pay role. Combined facilities worth around $65 million in operating revenue will come into the Logica fold.
According to MITS managing director Geoff Cosgriff, staff are well informed of deliberations and are generally happy with the move.
"We have been providing everyone with regular updates, and the response so far has been generally positive," Cosgriff said. "We are looking forward to having the capital to get involved in new projects and technologies."
According to Logica CEO Andrew Tindell, the rationale behind the acquisition is based on the compatibility of each companies' technologies and operations.
"Logica's operations are based around three key areas: telcos, energy, and utilities and finance. MITS' experience in the utilities sector was an important factor in our decision to acquire the company," Tindell said.
Although Logica has grown through acquisition in other regions, Tindell describes the recent strategy as being in anticipation of business opportunities through increasing rates of utilities deregulation.
"We are very interested in the sorts of opportunities provided by increasing deregulation," Tindell said. "The acquisition will allow us to be well positioned to take hold of that market, as well as taking advantage of outsourcing opportunities."