Updated: UXC's Red Rock acquires Glue

Updated: UXC's Red Rock acquires Glue

SOA specialist picked up by ASX-listed integrator's subsidiary

UXC subsidiary, Red Rock Consulting, has acquired Sydney-based IT specialist consultancy, Glue, to broaden its service orientated architecture (SOA) offerings.

Formed in 1999 as an independent consultancy, Glue will now be combined with Red Rock’s SOA practice. Glue CEO, Steve Wilson, will manage the combined operation and report to Red Rock CEO, Jonathan Rubinsztein.

“From an industry perspective, SOA we are finding is being picked up in the higher end of the market whether it is utilities, financial services or telco type environments,” Rubinsztein said. “That is where we are doing work and there is a strong fit between Glue’s focus and our focus. A key difference is they bring to bear a very strong capability around the enterprise architecture and methodological layer. They have a lot of strength in that area and we have a lot of strength in the delivery area.”

In time Glue will be marketed under the Red Rock brand and the joint entity’s head count expanded by 30 to 40 people in the next six months. The financial details of the deal were not released but Rubinsztein did not rule out future acquisitions.

“In the short term there is nothing we are focussed on in that regards,” he said.

In a statement to the ASX, UXC executive chairman, Geoff Lord said the draw of the deal was Glue’s position in the market.

“A large attraction for us in proceeding with this deal includes the fact that Glue has a strong position in the utility sector, and their capabilities will help us to strengthen the bridge of our Business Solution offerings into that sector by working with Field Solutions Group customers,” he said in the statement.

Earlier in September, fellow UXC subsidiary, Eclipse Computing, jumped into bed with education player and ASX-listed entity, Entellect Solutions’ (ASX: ESN) subsidiary, MXL Consolidated, to take an integrated management application, called EduPoint, to market.

But it has been a tough year for UXC, with the integrator posting a reduction in year-on-year profits despite an increase in revenue at the end of the financial year to June 30. Full-year profits after tax were $18.85 million, compared with $26.48 million for the previous year. The company was keen to emphasise revenue growth from $611.57 million to $715 million.

The company’s Business Solutions Group, which includes Getronics, Integ Communications and Red Rock, focuses on ICT solutions for the government and enterprise market. Its earnings dropped by 21 per cent to $28.7 million despite an 8.2 per cent increase in revenue to $440 million. The company blamed the difficult economy and rising costs for the downturn.

However, in February it announced a swathe of wins totalling more than $40 million. The wins ranged from Government and education to commercial deals.

This year, UXC also climbed into 10th place in IDC’s top 10 outsourcers list following its acquisition of Getronics in early 2008 and HP’s acquisition of EDS.

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