Japanese buyer for top NZ tech firm

Patrick Teo, CEO of BCS Group. Software and baggage handling company. New Zealand Herald Photograph

New Zealand's eleventh biggest tech company and one of the fastest growing, BCS Group, which deals in baggage handling and logistics systems, is selling an 80 per cent stake in the company to Japanese competitor Daifuku.

Daifuku, based in Osaka Japan and listed on the Tokyo stock exchange, is one of the largest materials handling company globally, with an annual turnover in excess of US$2.3 billion.

The company will continue to operate as usual with staff and company practices unchanged, but BCS chief executive Patrick Teo said the acquisition would give the company much needed scope in the market.

"We see it being mutually beneficial," Teo said. "BCS adds to Daifuku's global presence in baggage handling, and we are big in countries where they are not."

Teo said company growth had been restricted by slower traction in the market, not a lack of funds, and said the partnership with Daifuku would open the market up for the company to expand further.

BCS Group were number two on the Technology Investment Network TIN100 list of the top ten highest growth company's for the year and number 11 overall by revenue.

Company revenue for the year grew by 67.7 per cent to $140 million, boosted through several major deals with airports globally. This included a $55 million deal building baggage systems for Kuala Lumpur's International Airport, and collaborative work with Daifuku.

According to Teo the acquisition would create a need for more jobs in the company and would increase their R&D spend.

"The reality is that we will increase our portfolio of innovative solutions and products that will benefit not only our customers in the airport sector but also in the high growth courier sortation market," Teo said. "We will also be investing more heavily into R&D and that has got to be good both from an employment perspective and our on-going need for more staff, as well as creating more high value jobs," he said.

Daifuku chief executive Masaki Hojo said he was excited about the acquisition, noting that New Zealand had a strong reputation for innovation worldwide.

"We see significant potential in BCS and its flagship products and solutions, and we are very excited about investing in more R&D from New Zealand," Hojo said. "New Zealand has a reputation for very good, smart and robust innovation and we regard this as an area we want to invest in and grow."

Daifuku had previously invested in New Zealand through Auckland Uni Services in the early 1990's and had helped the University to develop the world's first fully controllable Inductive Power system through investment in the university's R&D programme.

The acquisition will be completed in December, with current management and structure remaining unchanged, and two Daifuku staff joining BCS Group's board.

BCS Group Factbox:

* Company revenue increased by 67.7 per cent to $140 million this year

* The company is the 11th largest tech company by revenue in NZ (TIN100)

* Automotive and airport systems manufacturer Daifuku has purchased an 80 per cent stake in BCS Group