Powerlan expands into Hong Kong

Powerlan, a local IT services company, has expanded regionally with the acquisition of Hong Kong-based Commercial Software Services Ltd. (CSSL), the 16-year-old IBM systems remarketer that rode the mid-range wave to gain what's now a formidable presence throughout the region.

Powerlan Managing Director Theo Baker indicated that Powerlan's shopping spree isn't over. He said he has four or five potential acquisitions in the works, most of which are e-business related, with a focus on application design and management tools in that environment.According to John Clough, cofounder and managing director of the CSSL Group, the acquisition by Sydney-based Powerlan will enable each of CSSL's offices throughout the region to serve as a one-stop shop for "the whole spectrum" of IT products and services under a co-branding arrangement that retains the CSSL identity.

CSSL, which Clough founded in 1983 with Thai banker Charn Sophonpanich, was majority-owned by the Sophonpanich family, with Clough holding a minority share. IBM acquired a 25 per cent stake in the company in 1990. The 100 per cent acquisition by Powerlan was valued at about $A10 million in cash and stock, with Clough receiving in excess of 1 million shares. Clough gained a seat on the Powerlan board of directors, and will retain his position as Hong Kong-based managing director of CSSL Group.

According to Clough, IBM welcomed the acquisition, as it had been trying to sell off its stake in CSSL for two years as part of a strategy to divest itself of equity holdings in its channel partners. "It's been quite difficult for them to find a buyer for a minority interest in a private company," he said. "This solution has been very good for them."

Powerlan represents a raft of suppliers, including IBM, Hewlett-Packard, Compaq Computer, Microsoft, Novell, Lotus Development, 3Com, Cisco Systems and Nortel.

With its acquisition of CSSL, Powerlan now has 17 offices in seven countries in Asia-Pacific, with over 500 employees and more than 2,000 corporate customers. The Greater China offices are in Hong Kong, Macau, Beijing, Shanghai and Guangzhou. Powerlan will provide IT services to the Asian market though a wholly-owned subsidiary, the Australian IT Careers Institute.