Asia on the agenda as ASI Solutions explores M&A
- 26 October, 2021 07:45
Nathan Lowe and Justin Lowe (ASI Solutions)
ASI Solutions is laying the foundations for a launch into Asia following another 12 months of strong financial performance, favouring acquisition over organic growth to expand beyond Australia and New Zealand (A/NZ).
ARN and sister publication Channel Asia can exclusively reveal that the Sydney-based business is accelerating plans to build out presence beyond trans-Tasman borders with Singapore now identified as the logical launchpad into Southeast Asia.
The move is motivated by a desire to capitalise on increasing revenues -- in excess of A$160 million during FY21 -- due to heightened customer demand across commercial, education and government sectors.
“Asia represents the next step for our business,” confirmed Nathan Lowe, managing director of ASI. “We have gone through a significant period of revenue growth and continue to prove our value over and over again which has opened the door into new market areas.
“We’re now at the stage to look overseas and realistically think that will take shape through acquisition or joint venture.”
Lowe acknowledged that the option of organic growth in Singapore and beyond is “unrealistic” in the sense that ASI is starting from a blank canvas across ASEAN, with management favouring a transactional purchase.
“Logically this is the easiest route to ensure an immediate presence with a management team in place who can drive the business forward from a strategic point of view,” Lowe outlined. “We’re not going to steer too far away from what we have done in the past with a strong customer base top of the agenda, plus expertise across commercial, education and government sectors.
“If we can find a business housing a strong end-user spread across those key verticals we then have the ability to plug this expertise into our technical teams to deliver growth and complement what we’re already doing in market.”
In terms of next steps, Lowe cited 2022 as a feasible time to act given the preference for face-to-face engagement before any potential deal is agreed.
“We have to meet and see an operation at work, not just the numbers,” Lowe confirmed. “We want a feel of how the organisation acts, how the founder holds themselves and carry out our own due diligence.
“We’ve had conversations with business owners in the past predominantly located in Singapore but never reached a deal, partly because we weren’t ready to launch. But now the time is right to assess what is available in the market.”
In assessing similarities between Asia and A/NZ, Lowe cited the importance of drawing on 35 years of experience in delivering leading-edge customer solutions as a key differentiator for ASI, which first launched to the market in 1986.
“A/NZ is known for adopting new technologies faster than other markets in the world and we continue to adopt a ‘guinea pig’ status which is one area of value we provide,” Lowe stated. “We also have a strong management team which is driven to provide ongoing value and our transformation during the past 35 years is testament to that.
“Singapore is a big player in Asia Pacific and we’re capable of delivering technology roadmaps for customers and supporting digital transformation journeys.”
Speaking as director of ASI, Justin Lowe also emphasised the ease in which the business can shift focus to servicing Singapore-based customers, largely in part due to a 24/7 support model.
“We have a support team in Manila of approximately 10-20 employees conducting administration tasks, delivering customer service and offering level two support, as well as solution architects carrying out design work,” he said. “We also have around 10 staff in Croatia and another key driver is vendor support which demonstrates the need for services expertise at the top end of town.”
A winning formula
ASI is no stranger to M&A following a flurry of activity in the A/NZ market, notably the buyout of Forward IT in October 2019, alongside BEarena in February 2020 and In Tec Solutions most recently in September 2021.
During the past few months, the provider has increased headcount to 150 through the addition of dedicated resources across account management, engineering, support and leadership. This is in addition to the recruitment of Darren Morris and Frank Grippi as new CIO and CTO respectively, tasked with working alongside commercial teams on both sides of the Tasman.
Specific to technology, the modern workplace represents an ongoing priority following sizeable investment in building a Microsoft practice which recorded “significant” growth during 2021. Other key areas include annuity and cloud service provider revenue streams, as well as the audio visual market, particularly via Clevertouch interactive panels within target sectors.
“The formula is working,” added Nathan Lowe. “Being a family business we are very focused on ethics and how we conduct business which is resonating with our customers.
“Opportunity exists to go deeper into our client base and continue adding more value through an ecosystem approach. We don’t need to be all things to all people but we do require trust.”
While executive focus remains firmly on expansion via acquisition in Asia, Lowe accepted that due to such a strong and consistence performance locally, ASI as a business would naturally become a target for M&A.
“It’s always interesting to see what is on the other side of the fence,” he clarified. “We’re at a size in which we have a very stable business with a loyal customer base and strong vendor relationships so logically, if we were to be on the sell side we’d need to understand the key drivers behind a deal.”
For any company seeking to acquire ASI, Lowe stressed the importance of looking after both customers and employees post-transaction, citied as “non-negotiable”.
“If a transaction was to take place, that would be a chance for Justin and I to be part of something even larger than ASI, whether as a publicly-listed organisation or part of a global business which would offer a humongous opportunity for individual learning and growth,” Lowe added.
“But there’s no hard and fast rule on this. We’re having too much fun doing what we’re doing and while there’s many ways to structure a deal, we’d need to be on the same page for anything to succeed.”
Building on this sentiment, Justin Lowe reiterated the point that despite inbound interest, company focus is squarely in the opposite direction.
“Never say never but we have other opportunities to grow,” he confirmed. “People are asking the question but we’re pretty much pushing them back at the moment.”