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March 2, 2009

Fujitsu ramps Oz services business with Kaz takeover

Japanese company picks up Telestra divestment

By CBR Staff Writer

Australia’s largest IT service company Kaz Group Pty Ltd is to be taken over by Fujitsu in a $125 million (AU$ 200 million) buyout from Telstra Corporation Limited.

“The acquisition is in line with Fujitsu’s long-term objectives to grow its Australian business,” Richard Christou of Fujitsu said of the deal, which not only will extend the regional footprint of the Japanese-owned company but will also bring with it IT services contracts with Australian state Federal Government.

Around 1,400 Kas employees will join Fujitsu Australia, which will have a headcount in the region of 5,000.

Parent company Telstra Corp has been trying to offload its services arm for some time. The telecommunications supplier wants to concentrate on mobile and fixed telephony, broadband, hosting, directory and pay TV services and Kaz is not the first of its divestments.

Previously it sold its business process outsourcing division to Fuji Xerox, and in 2006 it got rid of the pension administration business of Kaz, to Link Market Services Ltd for $166 million, saying the units were no longer strategic to the business. 

At that time the company insisted it had no intentions of selling off any other parts of Kaz, which it claimed had performed extremely well since it acquired it in July 2004 for AU$333 (around $215 million, at current rates).

Since then, the telecommunications company has had to restructure the services arm, with Telstra recently reporting that revenue for its IT services group had dropped in 2008 by $50 million (AU$80 million) against the year-ago performance.

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