Consolidation is happening in the printing world. But it is no different to what has been going on in other industries over the past 100 years, according to CSG acting CEO and managing director Mark Bayliss.

Bayliss told Sprinter that to survive a consolidating market, businesses in print should adapt to changing market conditions and evolving customer demands.

“As it is happening in many industries around the world, consolidation will continue. Businesses have changed so much as a result of disruptive technologies so we’re proud that we have advanced technologies in our offerings that we bring to customers early,” he said.

“If you want to be successful in the future, you have to constantly listen to your customers, look at what’s happening in the market and adapt. If you don’t you’ve only got yourself to blame because you should have done it in the first place.

“Things change and the strong and the smart continue to be ahead of the curve.”

CSG is no stranger to the consolidation market. The ASX–listed business (ASX:CSV) most recently entered into an agreement with Fuji Xerox Australia and Fuji Xerox Asia Pacific, with the latter proposing acquisition of CSG for $140.8 million.

Bayliss said this is “a fabulous move”, especially for its stakeholders as they’re getting shares at a premium.

Fuji Xerox has proposed to acquire 100 per cent of equity interests of CSG for $0.31 per share.

The bid is at a premium of 35.4 per cent to the one month VWAP (volume weighted average price) of $0.229 per share, or 55.2 per cent to the VWAP of $0.200 since the announcement of CSG’s FY19 full-year result.

“More importantly, it’s a great move for our employees and customers. It allows CSG to become part of a bigger, global organisation with all the infrastructure that a larger organisation has,” Bayliss added.

“Both businesses are very complimentary – Fiji Xerox tends to play in the enterprise space while our sweet spot in A/NZ is SMBs and SMEs.

“Many large Japanese corporations have bought over Australian businesses. What we get from that is the different view of the Japanese – they are very focussed on relationships and building relationships for the long term. And that’s’ something we found very attractive.”

A key differentiator of CSG, according to Bayliss, is its focus on technology.

“About 25 per cent of our business is IT – it’s technology and managed services. That was one of the attractors for Fuji Xerox to consider CSG,” he said.

“Technology is where the future competitive advantage is going to come from. Customers are looking for business technology solutions in a much more evolved form. Fuji Xerox doesn’t have anything as advanced as CSG does in A/NZ. So, it’s a seamless fit for both companies to be coming together.”

However, Bayliss said many traditional printers still have yet to grasp the concept of managed services and get on board with it.

“In today’s world, you have to put the customer first and customers are looking for solutions that have cloud capabilities. It’s about having a far broader and deeper customer proposition where customers can sort their printing, scanning, managed IT and finance needs in a one stop shop,” he said.

“That’s what this acquisition now enables and it’s about offering a fully-rounded and tailored business technology solution, as opposed to just printing.”

Over the last few years, CSG has been going through massive transformation and making improvements to its business.

The company, which has been in operation since 1988, started restructuring by selling off divisions to now solely focus on managed print business and print solutions.

“I was brought in just over a year ago as chairman. We started the transformation back then and that culminated in some big changes to the management team. Our focus then became more about values, customers and culture,” Bayliss explained.

“I then took over as acting CEO in the middle of March. In our last financial year, we achieved a profit of more than 70 per cent. It’s a testament to the good foundations that we now have in this business.”

Following the acquisition by Fuji Xerox, Bayliss said business will be as usual and that CSG will exist as a subsidiary of the former.

“There will be no redundancies made. The welfare of our staff and the continuing of their journey is important to us,” he said.

The only role that the acquisition will impact is Bayliss’ but he said that change will not take effect until both businesses’ needs are fully integrated.

“You can’t have two CEOs; the plan is for me to stay on within the business for a period of time in a yet undefined role. But I will be certainly be around for quite a while to help integrate it, etc,” he added.

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