ASX-listed outsourcing company KAZ Computer Services has confirmed its acquisition of Australian Administration Services (AAS).
Formally an AMP company, AAS was founded in 1987 to focus on the back-office administration of the financial group's superannuation funds.
KAZ notified the ASX of the $75 million purchase this afternoon, along with the announcement of several long-term contracts signed with AMP which came to a total of $70 million.
The related announcement outlines three new long-term contracts with AMP, including a new, six-year business process outsourcing contract, a three-year cheque printing and document management function, and a six-year data centre outsourcing contract.
In the light of the acquisition, KAZ has also released revised earnings forecasts indicating profits will increase from $9.2 million in 2000 to $24 million in 2001and to $39 million in 2002.
According to KAZ managing director Peter Kazacos, the acquisition reflects an increasingly close relationship between the two companies.
"We are forming a closer relationship with AMP through the acquisition," Kazacos said. "However, AAS has been operating as a separate entity from AMP for a considerable amount of time, and this recent acquisition will not compromise our ability to work with other financial groups."
KAZ has already proposed a significant expansion of its business process outsourcing activities through the acquisition, with Kazacos comparing the company to document processing company AusData which KAZ acquired last year.
"In reality, AAS is very similar to AusData and we will be looking at economising on the business processes of each company," Kazacos said.
However, Kazacos insisted that any economisation would focus on business operations and not staffing levels.
"We have no intention of laying off any of the AAS staff, not even at the management level," Kazacos said.
KAZ intends to use this latest acquisition to further strengthen its presence in the back office and administration outsourcing in the superannuation sector, both in Australia and overseas.
Kazacos is approaching the sector with a gung-ho attitude, saying that this most recent acquisition will give KAZ the opportunity to provide back-office administration to a series of different industries. He believes KAZ is well positioned to benefit from the increasing push towards a focus on core abilities both in Australia and overseas.