Konica Minolta set for expansion

Evan Johnson. Photo / Paul Estcourt

The new Australian parent of Konica Minolta New Zealand plans to expand its associated leasing operation across the Tasman, where it says there is huge potential for growth.

ASX-listed CSG announced before Christmas it was spending $132 million on a 90 per cent stake in Konica Minolta and buying 100 per cent of its leasing arm, Leasing Solutions.

CSG runs an identical print services business in Australia, where it has the Fuji Xerox dealership. It also has IT outsourcing and application-development businesses.

But it does not have its own leasing business, and managing director Denis Mackenzie said it planned to take Leasing Solutions to Australia to do the same thing there.

"We could double or triple the size of the business over the next few years."

Leasing Solutions had been run conservatively and had continued to make money through the recession, experiencing a loss rate of less than 1 per cent.

In New Zealand this week to finalise the sale process, Mackenzie said the purchase of Konica Minolta was a unique opportunity because it was an independent company which represented one of the major business-machine manufacturers.

The New Zealand operations, collectively known as the Onesource group, were bought from finance company Hanover Group for $150 million in a management buyout four years ago.

Chief executive Evan Johnson led the buyout and will stay on as managing director under the new ownership.

Despite the price discrepancy between the Hanover and CSG deals, Johnson said the group had consolidated its position and the shareholders had come out on top.

Mackenzie said Konica Minolta was profitable and had grown rapidly. Earnings before interest, tax, depreciation and amortisation were $20 million in the last financial year, on revenues of $120 million.

He said there was increasing convergence between print services and IT, and CSG planned to expand its IT businesses to New Zealand. "We will look to grow those businesses here either through further acquisitions or through organic growth."

There were also best practice sharing opportunities between the two countries.

Konica Minolta had the lion's share of New Zealand Government contracts.

CSG is headquartered in Darwin and is about to complete a A$65 million share placement to fund the New Zealand acquisition.