Business consulting and IT services group CS Holdings (CSH) has become one of the largest JD Edwards (JDE) partners in Southern Africa after buying the PricewaterhouseCoopers (PWC) Consulting JD Edwards practice for an undisclosed sum.
Earlier this year JDE and ERP.com ended their partnership in an acrimonious split following a dispute over fees.
"The acquisition of the PWC JDE practice means exponential growth for our JDE business, and puts us in a leading position in terms of JDE knowledge and experience in the local market," says CSH director Dave Vink.
He adds that the annual revenue contribution of the practice to CSH will be about R10 million to R15 million.
"PWC`s existing order book and the goodwill it brings with it will also benefit CS Holdings. PWC has a long record of successful implementations on large projects within prominent blue chip organisations."
This is the third large acquisition by the group in its current financial year. In October it bought Getronics SA, and the following month it entered a merger agreement with Argil Intellect in a deal worth R30.5 million.
Vink says the JDE acquisition enhances CSH`s ability to offer a true range of application services and will also add to the already established offerings in the SAP industry, the mid-range industry including Accpac and Great Plains, as well as a range of consulting and manufacturing services.
CSH CEO Annette van der Laan says the group`s JDE business has experienced significant organic growth in the past few years.
"The resources and experience that the PWC practice brings are of great value to CS Holdings and our customers," she says. "This acquisition further enhances the sustainability and critical mass of the CS Holdings JDE consulting business."
Vink says the deal brings CSH`s total number of senior JDE consultants to more than 30.
In terms of the deal, CSH will have access to both the local and global PWC client bases, which means all PWC clients will work with PWC and CSH on local JDE implementations in future.
PWC Consulting MD Alfons Meyer says PWC is not a first tier JDE player in SA, so the business is not aligned with the group`s strategic focus.
"We do not have critical mass to deliver large end-to-end, integrated JDE projects and we believe CS Holdings is the best option to take over the business, for two reasons. Firstly, they are already a major player in JDE and will probably be number one in SA following this acquisition.
"Secondly, CS Holdings is the best place for our JDE staff in terms of career development."
JDE MD Mike Evans says he regards CSH as a very serious business partner.
"CS Holdings is one of our premier partners. This is a positive move from both PWC and CS Holdings` perspectives, and I believe all parties will derive great benefit. Most importantly, JDE consultants from PWC will continue to work for one of our top JDE partners in Africa."
The CSH share price was unchanged at 88c on the JSE this morning.
CSH reported a 61% increase in revenue to R149 million for the six months to 31 December 2001, with a 39% increase in headline earnings.
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