Eclipse Acquisition Boosts USC Share of Business Solutions Market

14 May 2002

Utility Services Corporation Ltd (USC) has significantly expanded its involvement in the business solutions segment of the e-business market by acquiring Eclipse Computing (Australia) Pty Ltd.

USC executive chairman, Mr Geoff Lord, said today the Eclipse deal was the largest acquisition USC had made since it sold its MITS subsidiary in December 2000.

Eclipse's core business is the sale, implementation, customization, development and support of business software, predominantly for medium to large businesses.

The company sells a range of accounting and financial packages aimed at the mid-market including SunSystems and Microsoft Great Plains. It has over 350 clients for these products including Hoyts Corporation, Greater Union, MasterCard International and BMW Finance.

Eclipse also sells a range of customer relationship management solutions to a wide variety of clients including Flag Hotels and WorkCover. It is the leading supplier of Pivotal CRM software.

USC will make an initial payment of $3.4 million comprising a $2.1 million payment to vendors and $1.3 million to retire Eclipse borrowings.

In addition, USC will pay an earn-out premium based on a multiple of growth in pre-tax profit over the next two and a half years.

Mr Lord said the Eclipse acquisition would take USC's annualised turnover to more than $100 million. He said at current figures, Eclipse would account for over 10% of group revenue and about the same proportion of USC's pre-tax profit.

Mr Lord said Eclipse would fit neatly into the business solutions group within USC's e-business division. It would have good complementarity with QSP and Opticon.

Eclipse chief executive officer, Mr Bradley Stroop, said today the company would benefit greatly from becoming part of the USC group. ''This will give us the additional capital we need to expand and strengthen the Eclipse world-wide group relationship.''

Eclipse offers national coverage with offices in Melbourne, Sydney, Brisbane, Perth and the Pacific Islands. It has 75 staff. Eclipse was ranked Australia's 33rd fastest growing company in 2000. In 2001 it was ranked 27th.

Mr Stroop said one of the benefits to USC was that Eclipse would add significant capability to the group's front and back office solutions offering.

He said one of the major growth opportunities for Eclipse was its involvement in Microsoft Great Plains which is a key element in Microsoft's.net initiative.

The company's strongest growth is occurring in customer relationships management software which now accounts for 26% of annual revenues and is expected to increase its share of total sales.



About Utility Services Corporation

Utility Services Corporation (USC) is listed on the Australian Stock Exchange with market capitalisation in excess of $50 million and cash reserves of $26 million. USC operates through three business groups: 1. Utility Group comprising construction, inspection and maintenance of utility power distribution assets, meter installation, reading, data management and related services. 2. e-Business comprising e-business consulting, solutions and applications, telecommunications consulting and voice and data network solutions and services. 3. Technology Investments, which holds venture capital-style interests in strategic technology businesses.

USC reported a profit before tax of $1.6 million for the half year to December 2001 on revenue of $19.5 million. USC paid a fully-franked interim dividend of 2 cents per share on 30 April 2002.

Further information:
Geoff Lord Executive
Chairman
Utility Services Corporation Limited
Tel: (03) 9941 3100
www.utilityservices.com.au