$29m merger, public listing for Breeze and Technology Effect

Integrators Breeze and Technology Effect have announced their merger and will list on the ASX via their new parent Montech Holdings in transactions worth a combined $29.4 million.

Brisbane company Technology Effect, which placed No.23 in the 2012 CRN Fast50, has been acquired by Montech for $3 million cash plus shares. As of Montech's market value on Friday, the stock considerations are worth over $19.4 million for the founders of Technology Effect.

Award-winning Microsoft partner Breeze will be bought for $750,000 in cash and $6.2 million of shares, according to Montech's market value on Friday morning.

Breeze chief Nicki Page will become a director and CEO of Montech when the merger is complete. Co-founder of Technology Effect, Joe D'Aggio, will transition to director and COO of Montech.

According to a statement released Friday, both executives "will maintain responsibility for their respective businesses".

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"I am very excited at the prospect of both Technology Effect and Breeze joining Montech," said Montech chairman David Shein. "In both businesses I see outstanding entrepreneurs who understand technology and results, and have similar culture with respect to customers, partners and employees."

The purchase of Technology Effect is dependent on Montech Holding's successful raising of $4 million. The acquisition of Breeze is contingent on the Technology Effect deal. The merger is expected to be completed by early next year.

"The acquisition and forthcoming merger was brought about as a consequence of both Breeze and Technology Effect exploring how to evolve and expand their businesses in terms of offerings, services and geography," said Page.

D'Addio said that the two businesses have a common bond through cloud solutions. "Our two business models are very complementary, but most importantly there is a strong cultural alignment – a focus on high quality outcomes for customers and a common belief in the potential of cloud services and solutions."

D'Addio's career included a stint at ComTech, the Australian distribution company that David Shein grew to revenues of $700 million and 1400 staff before selling it to Dimension Data in 2001.

Sydney-based Breeze has had an acclaimed year both internationally and locally for its Microsoft Azure integration work with customer Bupa's Dental Corp. The firm was one of only three partners to win two awards at the Microsoft Australian Partner Conference last month.

In the same awards, Technology Effect was a finalist in the Microsoft data centre partner of the year category.

Microsoft's partner business and development director, Phil Goldie, lauded the merger: "There are a lot of changes happening in the partner channel and today’s announcement is a great example of how some of our most innovative Microsoft Azure partners are bringing new thinking to our joint customers."

The 10-year-old Technology Effect has a "largely Queensland-based" client base and employs over 60 staff. Breeze has more than 20 employees and specialises in cloud and app development.

Publicly-listed Montech was recapitalised under a new board of directors in June this year.