Dust settles on CSC/UXC merger

Published on the 02/03/2016 | Written by Beverley Head

CSC-UXC merger

Of the 2,500 organisations that CSC and UXC provide services to in this region, there are apparently only about ten where there is any significant overlap...

As part of the initial four month long integration process, now concluded, the companies have already identified who the new lead account manager will be in those instances and telegraphed that to customers yesterday. Existing commercial relationships between the company and its customers will not change according to CSC managing director Seelan Nayagam.

The 100 strong team which has stage managed the integration to date has operated under the banner of “do no harm” which has been polished to a more palatable “preserve and enhance” with regard to ongoing customer relationships.

The minimal overlap suggests that the newly merged entity will have a much broader reach into the ANZ IT services market, dramatically extending its market share.

CSC has now completed the acquisition, turning it into a 6,000 person enterprise with combined revenues in ANZ of $1.4 billion. At present the company has 140 roles open to fill; and while there will be some retrenchments as the integration beds down fully, Nayagam said that he did not expect there to be much change in overall headcount over the next 12 months.

Cris Nicolli, the former head of UXC, who officially retired from the role yesterday, though he will continue to consult to the business and guide client strategy, acknowledged there would be some job losses, particularly in roles which had been associated with UXC being a listed company in the past, though not many.

The new organisational structure which was revealed yesterday afternoon suggests that at least for the time being CSC will allow the UXC lines of business to operate pretty much unchanged. The UXC operations will initially continue to focus on small and medium scaled customers, leaving the enterprise work to CSC.

Nicolli confirmed that prior to the merger UXC was challenged to meet the needs of customers as they grew, and did not have the depth of balance sheet that would have allowed it to, for example, buy a customer’s IT systems and then lease them back as part of an as-a-service deal.

Despite some large wins – and another major public sector win is slated for announcement next week – Nicolli said that UXC had been stretched to meet the needs of growing customers. Now with the resources of CSC behind it – including 20,000 people internationally, it could extend its reach and be able to take on big deals more than “once every couple of years.”

CSC meanwhile gets access to a strong SME customer base, long standing relationships with suppliers such as Microsoft, SAP, Oracle and also a heritage of growth by acquisition. In a clear signal of future intent CSC has left untouched UXC’s very active mergers and acquisitions function, under the continued stewardship of Ralph Pickering,  in the newly merged enterprise.

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