Holding Redlich acted for Supply Chain Consulting on its expansion into Asia through the acquisition of the Magnus Consulting group of companies, which operates in Thailand, the Philippines, Malaysia and Indonesia.
IT consultants, Supply Chain Consulting and Magnus specialise in design and implementation of SAP systems, with particular skill in the manufacturing, retail and consumer products industries.
Dan Pearce, a corporate partner with a focus on IT at Holding Redlich, said the deal involved an equity injection, debt funding, a share buyback and a shareholder reorganisation on top of the takeover. “Adding further to the complexity was the fact that the acquired businesses were spread across four countries, each with its unique legal requirements,” he said.
“That has the capacity to delay things and you need to be proactive in dealing with the local lawyers in those jurisdictions.” Coordinating the internal restructurings at Supply Chain added to the challenge. “It was an interesting combination of activities that the client was undertaking all around the same time.”
He said the implications of the different taxation regimes had to be considered, in particular Thailand’s scheme to encourage head offices to the country, and Indonesia’s process for incorporating companies was “far more complex and formal than in Australia”. The lawyers had to allow “a reasonable amount of time” in Indonesia for that process, which in Australia tends to happen fairly quickly.
Other elements were the requirement for resident directors in the Philippines and foreign investment requirements in Malaysia. “All were able to be worked through, but they are examples of the peculiarities of the requirements in those territories.”
Pearce said Supply Chain Consulting was a fast growing company that had had to look to the north for opportunities outside the Australian IT market. “From what my client tells me, there is an amazingly rich set of opportunities up there. Businesses are looking for ways to increase productivity and certainly Supply Chain is excited about the opportunities up there.
“From the point of view of growing an Australian company, this is an exciting acquisition to have made.”