Feeds

Telstra dials up Kaz for $250m

Tier two Aussie services firms unite

  • alert
  • submit to reddit

Boost IT visibility and business value

Telstra has gone ahead with its purchase of the Kaz Group, shelling out A$333m ($250m) in a bid to become a major player on the Australian IT services scene.

The purchase price ended up lower than the A$400m figure tossed out earlier this week by Aussie media outlets. The deal combines the seventh (Telstra) and eighth-ranked vendors in the Australian services market valued at close to A$12bn. Giants such as as IBM, HP, EDS and CSC dominate the IT services realm here.

"The combination of KAZ and Telstra's current managed services activities will create a profitable business unit with initial revenues approaching $1bn per year." said Ziggy Switkowksi, CEO of Telstra.

Some local IT pundits warned that the size of telco giant Telstra could have a negative effect on Kaz's operations. Kaz receives top marks for paying close attention to the needs of local firms - something Telstra is not equally as well known for.

But one positive for current Kaz customers comes from Telstra's plans to operate Kaz as a stand-alone business. Current Kaz CEO Peter Kazacos will head up the business.

Kaz's directors unanimously approved the deal, which pays investors A40 cents per share - 4.5 cents more than Kaz's closing price at the end of last week. Trading of Kaz shares was halted yesterday after speculation of a Telstra buy popped up.

The transaction must meet standard regulatory approvals. Shareholders are expected to vote on the deal by late June.

Telstra is currently the 14th largest global telco with revenue of close to A$20bn per year. The Australian government holds a 51 per cent stake in the company and has been trying to sell its share for some time, although the Aussie Labor Party, along with others, has opposed the sale. ®

Related stories

Telstra services buy could harm Oz services scene
Aussie firms fight to take biggest loss for music downloads
Telstra backs down in BB pricing row
Telstra faces court over broadband price cuts
Music industry raids Kazaa's Australia HQ
Aussies triumph with online dunny map

Build a business case: developing custom apps

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Banking apps: Handy, can grab all your money... and RIDDLED with coding flaws
Yep, that one place you'd hoped you wouldn't find 'em
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Kaspersky backpedals on 'done nothing wrong, nothing to fear' blather
Founder (and internet passport fan) now says privacy is precious
Primetime precrime? Minority Report TV series 'being developed'
I have to know. I have to find out what happened to my life
Ex-IBM CEO John Akers dies at 79
An era disrupted by the advent of the PC
prev story

Whitepapers

Gartner critical capabilities for enterprise endpoint backup
Learn why inSync received the highest overall rating from Druva and is the top choice for the mobile workforce.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.