The Australian channel's biggest deals of 2018 (so far)

Deals, deals, deals

Merger-and acquisition activity is a mainstay of the Australian IT channel, and scarcely a week went by in the first half of 2018 that didn't see at least one tech company snapped up.

Major channel names that were purchased in the first half include Bulletproof, Cavalry, Sable37 and, just this week, Canberra IT provider Projects Assured.

Analysis of some 30 deals shows that while acquisitions of resellers and IT service providers continue, some of the hottest areas for M&A activity centred around communications, as well as software companies that had developed their own unique intellectual property.

Click through to check out the industry-moving deals that have shaped the headlines this year.

IT services

January: Hal Group acquires Melbourne-based BusinessWorks for $1.3 million

Sydney-based IT provider Hal Group has expanded in Melbourne with the acquisition of BusinessWorks for $1.3 million.

The cash deal valued BusinessWorks at 3.75x EBITDA.

BusinessWorks is a 20-year-old reseller that provides IT support services and solutions for small-to-medium sized businesses in Melbourne’s eastern suburbs. It boasts more than 90 clients and partners with HP, Microsoft, Brother and many others.

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Software

January: Australian internet of things firm Connexion acquires IT provider Security Shift for up to $5m

Connexion Media, an ASX-listed company focused on the internet of things in the automotive market, has acquired IT services provider Security Shift for up to $5 million.

Melbourne-based Security Shift offers cybersecurity services, infrastructure-as-a-service and software-as-a-service and IT governance, risk and compliance services.

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Communications

January: Telstra partner IMEI snaps up fellow Sydney unified communications provider BTAS

Sydney-based telco IMEI will merge with unified communications provider BTAS when it acquires the latter’s assets, staff and customer contracts.

The newly merged business will operate under the IMEI brand with more than 150 enterprise and government customers under its wing, and will manage more than 150,000 communication endpoints.

BTAS provides enterprise-grade unified communications, with partnerships with Alcatel-Lucent, Aruba, HP, Mitel, Ruckus Wireless and Microsoft.

IMEI is a Telstra enterprise partner providing managed mobility services to enterprise clients.

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Distribution

February: Aussie master distributor acquired by data analytics vendor Alteryx

A US-based data analytics vendor acquired its same-name Australian master distributor Alteryx Australia and New Zealand in a bid to boost its sales and marketing presence in the region.

Alteryx was looking to expand its local team with additional sales, channel, support and technical resources in order to better serve its more-than 100 local partners, which includes Amaysim, Commonwealth Bank, NBN, Australia Post and Telstra, the company said.

The data science company said the time was right to strengthen its position in the market, citing IDC data suggesting more than 40 percent of organisations in Australia and New Zealand had already invested in big data and analytics deployments, and would increase those investments this year.

“There is no doubt that data is reshaping businesses all over the world, and Australia and New Zealand (ANZ) are no exception,” Alteryx senior vice president of business development Steve Walden said.

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Software

February: Sydney's ELMO acquires remuneration software firm Pivot RemesysBody

Talent management software vendor has ELMO continued its acquisition spree with SaaS, cloud-based remuneration software company Pivot Remesys Group for $8.8 million.

The acquisition comes three months after acquiring SaaS payroll software system Sky Payroll for up to $1.8 million.

ELMO expands its business in New Zealand through Pivot Software, which is headquartered in Christchurch and has operations in Sydney.

Pivot Remesys Group was formed in 2016 when Pivot Software acquired Sydney-based remuneration management software vendor Remesys, expanding its operations across the Tasman.

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Services

February: Interactive acquires data cleansing and disposal specialist EraseIT

Multi-state managed service provider Interactive acquired data cleansing and asset disposal specialist EraseIT for an undisclosed sum.

EraseIT, which is headquartered in Port Melbourne, was previously owned by Christopher Ride, the former chief executive of Interactive who stepped down late last year.

According to Interactive, EraseIT supports the secure erasure and safe destruction or resale needs of more than 650 customers across Australia.

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Cloud and digital

March: Tech mega-merger Trimantium GrowthOps finally goes public after delays

Eight-company mega-merger Trimantium GrowthOps debuted on the Australian Securities Exchange (ASX) after finalising its $70 million initial public offering.

The listing pulled through after reopening the IPO due to funding delays, which the company said was due to issues with money from a foreign investor clearing in on time.

The company missed its 6 February settlement deadline as a result, pushing the IPO to 12 March and releasing a supplementary prospectus on 12 February.

The merger combines enterprise cloud and software provider 3wks, Asia-focused IT consulting firm Digital Moshi and mobile app developer Jtribe with five other digital, marketing and training companies.

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Communications

March: Melbourne's 5G Networks acquires communications reseller APTel for $6m

Publicly listed business broadband provider 5G Networks announced plans to acquire Asia Pacific Telecommunications Group (APTel) for $6 million.

Based in Melbourne, APTel provides voice, data and cloud communications services to 815 mid-market corporate clients, hotel groups and commercial offices. Its partners include Polycom, AAPT, Yealink, Broadsoft and Telstra.

APTel was originally established as an internal business unit of integrated property developer Deague Group to provide network solutions and telco services to its properties.

The acquisition price represents four times EBITDA in the 2017 financial year, with $3 million to be paid upon completion and the other $3 million in September. 

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IT services

March: Canberra solution provider OPC IT snaps up rival reseller Sennell IT

Canberra-based managed service provider OPC IT acquired fellow ACT solutions provider Sennell IT for an undisclosed sum.

The deal came after many months of negotiation between the two companies and will see Sennell integrated into OPC in the coming weeks.

OPC IT managing director Brett Norton said the acquisition came in light of a great synergy between the two organisations.

"Sennell have sold both Dell and HP into their clients through distribution but OPC will, using our strong Dell Platinum partnership, seek to move this business all across to Dell, which will also help us with rebates."

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IT services

March: DXC Technology snaps up Australian Oracle partner M-Power Solutions

DXC Technology announced plans to acquire Australian Oracle cloud partner M-Power Solutions for an undisclosed amount.

Founded in 2003, M-Power focuses on enterprise performance management (EPM) and BI with over 60 clients in Australia and New Zealand.

DXC said that M-Power will be integrated into its own Oracle business, DXC Red Rock, to strengthen its own EPM and BI practice with Oracle cloud analytics offerings.

“DXC Red Rock is today the largest independent provider of Oracle cloud licensing, consulting and managed services solutions in ANZ," DXC Australia managing director Seelan Nayagam said.

"The combination of M-Power with DXC’s Red Rock practice solidifies DXC’s position as the undisputed leader in Oracle Cloud Solutions in Australia & New Zealand.”

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Software

March: Melbourne software firm QA Software acquired by US construction giant Kiewit subsidiary InEight

Melbourne software firm QA Software acquired by US construction giant Kiewit subsidiary InEight

A US-based construction project management software developer is acquiring Melbourne-based document management software vendor QA Software for an undisclosed sum.

Arizona-based InEight’s acquisition will include QA’s flagship document management and collaboration application, TeamBinder, and will combine with InEight’s project management solutions to create a key product for project stakeholders such as contractors, owners and engineers.

QA Software was founded in 1995 and boasts a number of recognisable clients including Alcoa, Laing O’Rourke, Transport NSW, Brookfield Multiplex and others in Australia as well as overseas.

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Cloud

March: Bulletproof shareholders give go-ahead to $24.7 million AC3 acquisition

Bulletproof shareholders voted in favour of a scheme arrangement which will see AC3 acquire the cloud provider for $24.7 million.

In total, 85 percent of shareholders present voted in favour of the acquisition, or 98 percent of votes cast.

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Communications

March: Adelaide-based Telstra partner Wireless Communications acquired

Adelaide-based Wireless Communications — one of Telstra’s largest business partner and its 2016 partner of the year — was acquired by Greg Patten and Dwayne Bonner, owners of Echidna International whose main business is Echidna Pay, which develops corporate card/payment and banking applications and ERP platforms.

Patten told CRN that Wireless Communications’ previous owners, James Cuevas and Tim Johns – who founded the company in 2004 — had resigned as directors but would continue to be involved in the company: Cuevas as corporate sales executive and Johns as a consultant. General manager Nathan Freeman will continue in his role.

Patten said Echidna Pay had been a long time customer of Wireless Communications and the company had come on the market at a time when he and Bonner had been looking for acquisitions.

“Wireless Communications has been a provider of cloud and communications services to us for seven or eight years and an opportunity arose to purchase them. We had been very impressed with them as a supplier, so we took the opportunity.”

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Software

April: Canberra software developer Connexxion acquired by IT service provider FTS Group

Sydney IT service provider FTS Group has acquired software developer and IT services company Connexxion for an undisclosed sum, adding another Canberra-based company under its umbrella.

The acquisition bolsters FTS’ presence in the capital, adding to its acquisition of Microsoft cloud provider Veritec in 2014.

“This latest acquisition further validates our dedication to the Canberra IT ecosystem, including both defence and the public sector,” FTS chief executive Stephen Keys said.

“We have been strategically bolstering our capabilities in recent years as we put steps in place to grow beyond our current footprint to service a national market.”

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Cloud

April: Melbourne AWS partner Nebulr acquired by UK-based Contino

Melbourne-based Nebulr has been acquired by devops and cloud transformation consultancy Contino for an undisclosed amount.

As part of the deal, Nebulr chief executive Craig Howe will take on the managing director for Contino Asia Pacific role, and its 50-person staff will join Contino’s Australian business as well.

Like Nebulr, Contino is also an AWS partner, whose clients include Barclays, Tesco, William Hill and Concur, and has offices in London, the United States and in Sydney and Melbourne.

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Software

April: Citadel Group acquires medical SaaS provider Anaesthetic Private Practice for $2 million

Citadel Group acquires medical SaaS provider Anaesthetic Private Practice for $2 million

The Citadel Group has acquired Queensland-based medical software-as-a-service provider Anaesthetic Private Practice (APP) in a $2 million all-cash deal.

APP was founded in 2010 and provides cloud-based practice management and billing solutions to anaesthetists in private practice, with close to 300 customers mostly in Queensland.

According to Citadel, 89 percent of APP's revenue is recurring, with approximately $500,000 in annual earnings.

APP will be a direct bolt-on to its existing eHealth capabilities, according to Citadel. In September last year, Citadel outlined its ambitions to grow its health business when it paid $8.2 million to acquire Brisbane-headquartered eHealth system supplier Charm Health, which also provides medical software solutions.

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IT services

April: DXC Technology snaps up Melbourne Microsoft partner Sable37

Global IT giant DXC Technology has snapped up Melbourne-based Microsoft partner Sable37 for an undisclosed amount.

Sable37 will be integrated with DXC Eclipse, the company's Microsoft Dynamics 365 specialist practice, along with eBECS, a global Dynamics partner that DXC also recently acquired.

Sable37 specialises in cloud-based solutions built on Dynamics 365, targeting customers in retail and distribution, homebuilding, food manufacturing and government. The company was founded by Alan Duhamel and David Attenborough in 2004 in Melbourne.

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IT services

April: Sydney MSP merger: Nexon Asia Pacific acquires Cavalry

Sydney-headquartered managed service provider Nexon Asia-Pacific acquired fellow Sydney MSP Cavalry, as Nexon looked to strengthen its hosted desktop, hybrid cloud consulting and managed services offerings.

The acquisition followed a partnership between the two companies spanning more than 12 years, with the combined companies’ expertise and “deep domain knowledge” set to bolster Nexon’s offering and deliver added value to both organisations’ clients, according to Nexon managing director Barry Assaf.

“By extending our capabilities and capacity through such partnerships we are able to offer our customers added benefits and access to additional expertise, particularly when it comes to cloud services,” he said.

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IT services

April: PS&C acquires Melbourne consultancy Seisma

IT services provider PS&C acquired business and technology consultancy Seisma with the aim of growing the overall business and client base.

Melbourne-based Seisma had 120 staff working with customers in financial services, communications and utility sectors, with forecasted revenue of $21 million this financial year.

“The company had identified several areas where it needed to extend its existing business, and it believed acquiring Seisma would fit with its strategy to become a leader within its specialised practices,” PS&C managing director Glenn Fielding said.

“We identified the need to increase our presence in the growing areas of digital enterprise and information management and analytics, and Seisma has shown itself to be a growing IT provider and a specialist in these areas.”

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Communications

April: Telstra partners merge as Azentro acquires Adelaide's Data Mobility Voice

Queensland Telstra partner Azentro acquired major South Australian Telstra partner Data Mobility Voice for an undisclosed sum, as it looked to grow its national influence in telco services.

The deal saw Data Mobility Voice, the Adelaide-based telecoms equipment supplier, continue to trade as it is today, with co-owner Greg Fletcher Harris staying on as managing director, and benefitting from Azentro’s added network of capabilities.

Fletcher-Harris said the merger was a great route to growth for the company as it delivered a greater depth of services for his company's customers.

“For instance, we have a couple of people on our helpdesk, Azentro have five or six, so the level of service that we can provide to our customers is significantly enhanced by those depth of resources,” he said.

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Office supplies

May: Complete Office Supplies snaps up rival supplier Lyreco to compete with Winc after OfficeMax acquisition

Australian office supplies company Complete Office Supplies has acquired rival workplace supplies provider Lyreco Australia for an undisclosed sum.

According to COS, the move has established it as the second largest business-facing office supplier in Australia and positions it well to compete with Winc, which recently merged with Office Max.

“We are a proud Australian family-owned business, which I established 40 years ago selling typewriter ribbon and carbon paper in Western Sydney,” COS founder and chief executive Dominique Lyone said.

“Acquiring Lyreco will help continue our growth and success and give Australian business a strong alternative to buy from an Australian owned company.”

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Software

May: LiveTiles acquires Microsoft AI software firm Hyperfish

ASX-listed software house LiveTiles acquired US-based AI software company Hyperfish, adding its employee profile and directory management offering to LiveTiles’ workplace platform.

Hyperfish’s software makes use of AI and bot technology to identify missing or incorrect employee directory information and initiates a conversation with employees to collect and validate data.

The software automatically updates employee directory records within Microsoft Azure and Office 365, ensuring information is accurate and complete.

Hyperfish directors Brian Cook, a co-founder of Nintex, and former Microsoft executive Chris Johnson both joined LiveTiles to continue heading the business.

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Software

May: Oracle partner JCurve Solutions acquires software provider Riyo for $600,000

Sydney-based JCurve Solutions has acquired booking, dispatch and payment (BDP) software company Riyo to complement its existing enterprise resource planning (ERP) business.

JCurve will pay $600,000 in cash for Riyo, with the deal expected to be finalised on 31 May.

“The acquisition of the Riyo software platform adds to our growing suite of solutions. We are purchasing a robust, scalable, industry standard technical architecture which has been successfully tested through product trials,” JCurve chief executive Stephen Canning said.

“The software platform could be rolled out in its current state or may be developed into other verticals and integrated into our ERP offerings.”

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IT services

May: PS&C expands client base into federal government with acquisition of Canberra-based NTH Consulting

PS&C has acquired IT services provider NTH Consulting to expand its customer reach into the federal government and the Australian Capital Territory government.

The acquisition is expected to extend PS&C’s capabilities across strategy and governance, cyber security, technology and project services, service integration and management.

“The acquisition of NTH Consulting extends our footprint into a new region that gives us access to the federal and ACT governments where cyber security and governance are becoming increasingly important issues,” PS&C managing director Glenn Fielding said.

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Web hosting

May: VentraIP snaps up On A Cloud, Spiderweb Hosting and Boot Domains, and 1000 customers

Australian hosting provider VentraIP continued its acquisition spree by snapping up three hosting companies along with 1000 customers and 2400 active services.

The three companies were On A Cloud, Spiderweb Hosting and Boot Domains, which will all be folded into VentraIP once customers have been merged.

VentraIP chief executive Angelo Giuffrida said the company also had another three acquisitions in the works.

“As the market continues to consolidate, we are proud to welcome customers from On A Cloud, SpiderWeb Hosting and Boot Domains to the VentraIP Australia family, and we hope they enjoy the great customer service and technical support offered by our local team,” said Guiffrida.

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IT services

June: DWS acquires CRN Fast50 No.5 Projects Assured for up to $43 million

DWS has acquired Canberra-based strategic management and IT consulting provider Projects Assured for up to $43 million, giving the Melbourne IT outsourcing company greater exposure to potential federal government clients.

Founded in 2015, Projects Assured established itself by focusing solely on customers in Canberra, predominately in government. Its services include strategy and business improvement, project and program management and enterprise architecture and technology.

Last year, Projects Assured grew its revenue by 158.4 percent to hit $17.7 million, earning the No.5 spot on the 2017 CRN Fast50. At the time, the company had 90 permanent staff.

DWS will pay $30 million in cash reserves and debt to Projects Assured upfront, based on an EBITDA multiple between five and six, with an additional $13 million up for grabs based on EBITDA performance over the next five years.

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Web hosting

June: Hosting firm Dreamscape Networks acquires domain name and hosting provider for $8.5 million

Perth-based Dreamscape Networks has acquired domain registration and web hosting business Domain Name Registrar (DNR) for $8.5 million, the hosting provider’s second acquisition this year.

Dreamscape will acquire DNR’s customers, systems and brand assets from Melbourne-based Domain Registration (Australia) Pty Ltd, which trades as Domain Registration Services.

The deal is the company’s fourth “bolt-on” acquisition in the last 16 months, most recently acquiring Gold Coast-based Quadra Hosting for $2.5 million in January, and is the fifth acquisition overall since going public in December 2016.

Dreamscape acquired Sydney-based Net Logistics in March last year, Singapore-based Vodien Group in June and Sydney-based Enetica Group in October.

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Software

June: SaaS provider for taxis Mobile Technologies International acquired by Cabcharge for $6.6m

Melbourne-based Mobile Technologies International (MTI) has been acquired by digital payments firm Cabcharge for $6.6 million.

MTI provides SaaS automotive dispatch and booking technology for taxis in Australia, New Zealand, North America and Europe, and is also the owner and operator of UK-based Mantax Taxis, a network of cabs in Manchester, England.

Cabcharge said the acquisition would fast-track the creation of dispatch and payment tools for the taxi industry, while also expanding its customer reach.

“This collaboration of technology and experience will be a win for Cabcharge’s customers and a win for MTI’s Taxi industry customers. Working directly with our core dispatch and bookings technology enables us to improve the service experience for a number of key stakeholders,” Cabcharge chief executive Andrew Skelton said

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Software

June: Sydney vendor BigTinCan to acquire SaaS provider Zunos Technologies for $3.2 million

Sydney-based software vendor BigTinCan was set to acquire training software provider Zunos Technologies for $3.2 million to complement its North American business.

Australian-owned Zunos provides sales and partner learning and enablement to users in 37 countries through its software-as-a-service offering, with clients including American Airlines, Sony Interactive Entertainment and Telstra.

Zunos is headquartered in San Francisco, with a sales office in Denver and development operations in Sydney and Brisbane, which will expand BigTinCan's presence to the US west coast and midwest.

The acquisition is expected to complete in July subject to the completion requirements and due diligence formalities being met.

BigTinCan will be funding the acquisition from its recently completed $15 million equity raise.

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Print and IT services

June: EFEX acquires office equipment supplier Think Office Technology

Managed IT and print specialist EFEX has acquired Queensland’s Think Office Technology for an undisclosed sum, with the companies merging to form an 11-bureau managed services and print powerhouse.

The deal, revealed to CRN, will bring together Think’s eight locations from across Queensland along with its more than 70-staff workforce into EFEX, to create a combined company with an expected annual turnover of more than $65 million and a headcount of about 115, according to EFEX managing director Nick Sheehan.

Think’s branches in Cairns, Townsville, Mackay, Emerald, Gladstone, Brisbane, Sunshine Coast and Toowoomba will join EFEX’s current footprint of three offices to form an 11-branch network spanning from Adelaide in the south to Cairns in the north

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