Alstom IT buyout nears completion

Alstom IT's French owners are tipped to hand the distributor over to its Australian buyers next Friday, 27 February.

Executives at Alstom IT, a subsidiary, via Alstom Australia, of Paris-based energy and transport infrastructure giant Alstom, announced plans late last year to buy out the European owners.

Laurie Sellers, CEO at Alstom IT, confirmed the management buyout was progressing well, with the final change of hands expected in the last week of February.
'It's very close now and our hope is to make the transition at the end of the month, which probably means Friday [27 February]. So from 1 March, we're probably going to be trading as the new entity,' he said.

Sellers said the buyout process had run smoothly, with both sides remaining amicable to the end. Alstom had granted Alstom IT use of the present name for 18 months after the handover, which would likely prove a boon for the new entity.
'That will basically help us reduce the number of things that we had to think about and change, getting new business cards and signage and so on,' he said. 'We've registered a company called Alstom Information Technology Limited and that's what we'll trade under.'

Sellers said Alstom IT would be able to carry on with the same customers, same buying relationships, same back-end IT and office processes as before. Clients could feel reassured that no major disruptions were expected in the initial stages, he said.
'At the moment, it'll be business as usual, because there'll be enough going on in the background to keep us busy,' Sellers said.

However, Sellers said the company of course could not rule out future changes, 'but there's nothing we can talk about right now'. He himself had no burning desire to change anything, he said.

Last year, Sellers said the deal would be funded by private equity and a bank loan.

The team had been approved for working capital financing from the Commonwealth Bank. That process had been long and involved, with the Bank investigating every aspect to see how sound the business was.
'Management buyouts are not as easy as they sound. There are a lot of things to consider, when you've been part of a worldwide organisation,' Sellers added.

However, the very detail of that third-party investigation had given the team confidence in the business's strength and had won them 'enough' capital to get the distributor from June to August, its busiest time of year. Private equity had added to that, he said.

Sellers, Alstom GM Greg Newham, operations manager Ken Harper and finance manager Katie Kenny had pitched the buyout proposal to the parent company last year following a global restructure. The parent company had accepted.

Alstom Australia had wanted to better align all its local divisions with those of the international entity as part of the restructure. However, Alstom IT was something of an odd man out among the other mainly energy-and-transport-related Alstom subsidiaries.
'They've stovepiped them into a structure more in line with their core businesses and that caused a bit of a delay for the IT business, because we've been part of Alstom for a long time,' Sellers said.