Fuji Xerox targets SMB, IT services in CSG deal

Published on the 25/10/2019 | Written by Heather Wright

Fuji Xerox acquires CSG

AU$140 million deal on the table…

Fuji Xerox is upping its play for both the SMB and IT services and consulting markets across Australia and New Zealand, with plans to acquire Australian IT company CSG.

The AU$140 million deal will enable Fuji Xerox to push out its services and consulting offerings, with CSG having a significant IT services business – which includes the CodeBlue brand – while also expanding in its more traditional hardware market.

The acquisition, expected to be completed by mid-February 2020 subject to regulatory approvals and customary conditions, will see ASX-listed CSG become a subsidiary of Fuji Xerox Asia Pacific.

“This acquisition will materially expand and diversify our footprint across the industry.”

The company, which has 670 staff and nearly 10,000 customers, mainly SMBs, across Australia and New Zealand had sales of around AU$217.6 million for the year ending June 2019.

It acquired New Zealand’s IT services provider CodeBlue for around $15 million back in 2015.

Takayuki Togo, Fuji Xerox Australia managing director, says the acquisition reflects the company’s desire for growth and to expand its customer base into the small to medium businesses sector.

“This delivers on our strategy to broaden the Fuji Xerox offer to a diverse range of organisations across various businesses with the addition of relevant software, solutions and services that customers are now demanding from print and document providers,” Togo says.

“It is important our customers are in a position to rely on us to address their biggest business challenges, keep them competitive and enable them to focus on their core business.”

Fuji Xerox has had a bumpy ride in New Zealand and Australia in recent times, including its well documented accounting scandal.

Peter Thomas, Fuji Xerox New Zealand managing director, says internal changes introduced in recent years have seen a return to ‘doing the basics really well’, which has translated into a return to profitability ‘and with that confidence from our shareholder to continue investing in our future here in New Zealand’.

“This acquisition will materially expand and diversify our footprint across the industry in New Zealand,” Thomas says, adding the two companies are complementary in terms of the client segments serviced.

“Our strategy is about getting out in front of a maturing print services business and CSG’s IT services platform represents an opportunity to strengthen the value proposition we can bring to customers, who are looking to us to lead in bringing integrated and cost-efficient solutions.”

CSG chairman Bernie Campbell agrees the two companies are an ideal strategic fit.

“CSG is the ideal strategic fit for Fuji Xerox’s global business with our expertise in IT managed services and office solutions for the SME sector in Australia and New Zealand complementing Fuji Xero’s leading print and technology operations,” he says.

“Our more than 10,000 SME customers across Australia and New Zealand will benefit from our long-term integration with Fuji Xerox through increased scale, broader product and service capability.

CSG’s largest shareholder, Caledonia (Private) Investments, which holds 29.1 percent of CSG shares, has said it will vote in favour of the buyout scheme.

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