The Commerce Commission said today it had opened an investigation into Sydney-based Objective Corp Ltd’s acquisition last year of Master Business Solutions Ltd – a company not on the NZ Companies Register.
An hour after I mentioned to the commission that it seemed to be investigating the acquisition of a company that doesn’t exist, it re-issued its release with the name corrected. It’s Master Business Systems Ltd.
The commission’s investigation will necessarily be about more than a one-on-one buyout. The Sydney company has had a subsidiary in New Zealand since 2003, and has acquired other New Zealand companies in the same business line in the last 18 months.
Objective director Tony Walls replaced Laurence Bevan, of Feilding, as director and Mr Bevan & 4 others as shareholders of a company called Master Business Systems Ltd on 29 November.
Both companies supply software used to lodge building consent applications and manage the building consent process. The commission said their brands included Objective Trapeze, AlphaOne, GoGet & GoMobile.
Mr Bevan founded Master Business Systems in 1995, and GoGet & GoMobile are its brands. He remains registered as a director of internet service provider Gocouncil Ltd, although he’s no longer associated with its 50% shareholder, Master Business Systems.
The Companies Register shows that Objective Corp has owned one New Zealand subsidiary, Objective Corp Solutions NZ Ltd, since its incorporation in 2003, and acquired 4 new companies in the Alpha group, including Alpha Processing Ltd, plus Omega Group Holdings Ltd, early last year.
Objective acquired Onstream Systems Ltd in 2016, renaming it as Objective Trapeze NZ Ltd in June 2019.
The commission said today it would consider whether the “MBS” acquisition would be likely to substantially lessen competition in any relevant market in breach of section 47 of the Commerce Act. The commission said Objective didn’t apply for clearance for the acquisition.
The commission said its focus would be on the extent of competition likely to have been lost as a result of the acquisition, and the extent to which the merged entity was likely to be constrained from raising prices or lowering the quality of either its products or associated services.
The commission said it was seeking responses by 15 June, a date which has been retained after the correction.
Section 47 of the Commerce Act prohibits acquisitions likely to substantially lessen competition. Under the voluntary notification regime the commission administers, parties can apply for clearance if they consider their planned acquisition could raise competition issues. If they don’t apply for clearance, the commission can initiate an investigation into a proposed or completed acquisition. Maximum penalties for breaches are $500,000 for an individual & $5 million for a company.
The commission had already posted its press release this morning on a public news site, before I completed my checks. I posted the original version of this article before contacting the commission to see what its next steps would be, in the end just suggesting to the commission it was investigating the acquisition of a company that doesn’t exist. The commission has since corrected its case register.
Why highlight this first? Almost every consent application I see go to Auckland Council has parties named wrongly, and in this case the commission has gone to some trouble to present the incorrect target company name all the way through its case register document, and also in a press release.
Attribution: Commission release, Companies Register, company websites.