AST Creates $100M Oracle Super Integrator With Serene Acquisition

AST Corp. has in one fell swoop built an Oracle services global powerhouse with its acquisition of Serene Corp.

The deal provides the public sector specialist -- a perennial Oracle partner of the year -- with an Oracle Gold services provider that has cloud muscle, commercial clout, international reach and offshoring capabilities. Terms of the deal were not disclosed.

The deal adds $30 million in annual sales and 225 employees to Chicago-based AST, making the new combined company a $100 million, 500-employee-strong Oracle services dynamo. It also catapults AST into the commercial market, where it intends to focus on three highly specialized verticals: high-tech, life sciences and retail real estate.

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"This creates one of the most dominant privately held Oracle services companies in the world that is not private-equity backed," said Martin Wolf, president of Martin Wolf M&A Advisors, Walnut Creek, Calif., which was an adviser to AST on the deal. "This means they can go head to head against the Accentures, KPMGs and Deloittes. With Serene, AST is going to punch well above its weight class. They are now like a welterweight that hits like a heavyweight."

The Santa Clara, Calif.-based Serene is one of the top Oracle CRM and data management leaders, with 125 Oracle Software-as-a-Service-based customer experience and master data management projects under its belt. All of Serene's employees are remaining in its Santa Clara offices, including CEO Niken Patel.

AST founder and CEO Pravin Kumar said the deal is poised to drive exponential growth of the system integrator's 24-hour-a-day, seven-day-a-week managed services support business with rolling coverage across the globe. He said AST expects to double its managed services business over the next 18 months as a result of the acquisition.

"What we are going to get the most bang from is increasing our managed services business," he said. "Customers are working in multiple time zones with technology that is getting more complicated and are finding it hard to staff up to it. That's where we come in with managed services."

AST, which is celebrating its 20th anniversary with its first acquisition ever, is already recognized as one of the most sought-after, fixed-price Oracle service providers. The company has a super specialization on six public sector verticals: state and local government; public education including universities; mass transit; airport; public utilities; and nonprofits. That focus has won the company raves from customers and made it one of the most profitable of all the Oracle Platinum partners.

Unlike its larger system integrator competitors, AST focuses exclusively on Oracle and does not rely on 1099 subcontractors. That has given the Top 100 Workplace Chicago award winner, which has employees in 22 states, a delta force of highly skilled Oracle technical talent in a market where larger system integrators have been plagued by high 1099 employee turnover.

One of the hallmarks of the AST culture, in fact, is a sharp focus on customer value rather than billable hours. "We don't incent our employees on billing hours," said Kumar. "Our focus is on whether the client is happy, was the project on time and whether we see positive feedback from customers. Those are more difficult to measure. It takes more management time but it is the right thing to do. If you incent people to bill more hours, they will bill more hours, and in the end, the client will suffer."

Oracle's enterprise acquisition binge, including the Sun Microsystems hardware business, has given AST an end-to-end, high-value, vertically integrated "soup to nuts" enterprise offering to provide customers, said Kumar. Furthermore, he said, partnering solely with Oracle has allowed AST to establish a close working relationship with the Oracle sales force. "In my opinion, they have the best sales force in the business," he said. "When they get the marching orders to sell a product they get it done."

Key to AST's success in the future is maintaining its unique culture and focus on driving customer value, he said. "The challenge for us as we grow is recruiting the same high-caliber employees, maintaining the same high quality and culture that we have," Kumar said. "That is the value add that we bring. We are going to infuse that into the acquisition and maintain that throughout the company. That is where we will realize the benefits."

PUBLISHED SEPT. 17, 2015