Kaz BPO’s 120 staff have already joined FXGS’s 370 existing employees, but will remain in their current workplaces while a review of the newly combined operation is completed during the next few months.

FXGS general manager Andy Berry says the deal will grow the company’s existing $80 million BPO revenues by around 20 per cent. FXGS represents around 12 percent of Fuji Xerox Australia’s overall annual revenues of approximately $650 million.

“We have had our eyes open for a while and looked at a couple of acquisitions before deciding not to proceed for one reason or another,” says Berry. “This one happens to be right, not just for us, but also for Telstra and Kaz.”

Kaz marketing strategy and communications general manager Kevin Ryder says his company’s BPO operations represented only around 2 per cent of the company’s annual turnover.

“It was not a core part of our operations,” he told IT Wire. The BPO group was involved in document management and call centre operations whereas the overall company is now more focused on application development and IT services.

As well as BPO services, FXGS offers document outsourcing communication services. This involves the design, creation and distribution of both paper and electronic documents for a range of customers. The group also undertakes managed output services which cover the management and maintenance of printers, scanners, fax machines and multi-function devices for large clients.

“Our strategy is helping customers manage their document-intensive business processes,” says Berry. “Increasingly this is done using software applications and workflow solutions, and this is where the Kaz BPO offering fits in very neatly.”

Existing FXGS BPO customers include Brisbane City Council, Rockdale City Council, RMIT, EDS and the New South Wales Rail Infrastructure Corporation.

Mr Berry says his company is not planning any other immediate purchases, intending to continue to pursue growth organically. “However, we continue to have appropriate and strategic acquisitions as part of our growth strategy,” he says.

Kaz, which is Australia’s largest locally-owned IT services company, has undergone a number of changes during the past 12 months as Telstra strives to align it more closely with its developing Next IP and Next G networks.

In May a business review led to some 200 staff redundancies, or around 7 per cent of the company’s workforce. The company also carved off its superannuation business during 2006.

Telstra purchased Kaz in 2004 for $333 million. At that stage the company had plans to create a nationwide services company aimed squarely at small and medium-sized companies. This strategy has since changed with Kaz now focused on creating and implementing applications for larger firms.