The Australian channel's M&A action for 2019

Mergers and acquisition are a constant feature of the channel, so to remind you of who bought who, when and why, CRN has put together a summary of 2019's action!

Click through to see the biggest mergers and acquisitions of 2019.

Eagle-eyed CRN readers will remember we published a similar gallery halfway through the year. We wanted to include a full list this time around, so we’ve cherry picked the most significant transactions and included them in this gallery too.

Tech Data to be acquired, goes private

14 November

Tech Data revealed in November that it had struck a deal to be acquired by private equity firm Apollo Funds for US$5.4 billion.

New ownership won't change operations, other than TechData's stock going private.

Tech Data global CEO Rich Hume said the acquisition presented an opportunity to enhance its offerings and differentiate its products.

Weeks after the acquisition was announced, Apollo Funds upped its bid to US$6 billion in order to fend off a rival proposal from a competing bidder.

Read the full story here.

EY claims security dominance with Aleron acquisition

11 November

EY made two major Australian acquisitions in 2019

The first came in January with Sydney-based SAP specialist Plaut IT, which EY said would take the company from being known less as an advisor and more as an end-to-end transformation provider.

The other acquisition came 11 months later with another Sydney-based company – security consultancy Aleron.

EY noted that it would acquire Aleron’s eDNA security analytics and risk reporting platform, in addition to its 36 staff and contractors.

EY claimed that the Aleron acquisition made it the largest security provider among the Big Four consulting firms, in addition to professional services as a whole.

Read the full stories here and here.

Servian buys Vibrato, enterpriseIT

5 November

Data and analytics consultant Servian also bought two companies in 2019.

The first was automation and DevOps specialist Vibrato, which Servian claimed formed the largest privately owned pure play data consulting firm in the country.

The deal combined two AWS, Google Cloud and Azure partners, as well as Vibrato’s 50 staff being added to Servian’s 400.

The second came in November when Servian expanded into New Zealand by buying Kiwi MSP enterpriseIT, bringing its headcount to 530.

enterpriseIT provides managed IT services, particularly to airlines and government customers. Its specialties include cloud technology, data and AI.

Servian specialises in digital delivery, AI and cloud migration. It helps enterprise customers draw insights from their data.

Read the full stories here and here.

ASG acquires Brisbane MSP 1ICT

4 November

ASG acquired Brisbane-based MSP 1ICT, a company that offers “simplified packages for organisations of all sizes” that include support services and have the option to bundle hardware, as well as digital transformation capabilities.

ASG CEO Dean Langebach said 1ICT would give his company “a solid base in Queensland,” adding that the two companies ould work together to leverage each other’s clients, capabilities and industry knowledge.

Read the full story here. 

Bravura buys Midwinter, FinoComp

29 October

ASX-listed financial software vendor Bravura Solutions made two big buys in 2019.

In August it spent $50 million to buy Midwinter, another financial SaaS provider. Based in Sydney, Midwinter develops the financial planning software AdviceOS, providing back office administration for financial advisers and self-directed digital advice portals for superannuation funds.

A month later, Bravura forked out $25 million for Australian ISV FinoComp, a software and data analytics provider that also offers client reporting, performance reporting and regulatory compliance, predominately for the UK wealth market. Bravura said the FinoComp acquisition would open up a raft of new opportunities such as the opportunity for “plug and play” solutions for the broader market.

Read the full stories here and here.

Fuji Xerox snaps up CSG

24 October

After years of trying to turn around its struggling fortunes, CSG announced in October that it would be acquired by Fuji Xerox for $140 million.

Fuji Xerox said it will expand its SME business off the back of the acquisition while strengthening its ANZ presence in IT print device and managed print solutions.

Read the full story here.

Trend Micro buys Sydney’s Cloud Conformity

22 October

Trend Micro bought Sydney-headquartered security startup Cloud Conformity for US$70 million.

Cloud Conformity provides cloud security posture management, which Trend Micro said will help address misconfigurations and unprotected user accounts in public cloud.

Cloud Conformity became part of Trend Micro’s hybrid cloud security practice, qhich accounts for a quarter of its near US$1 billion in annual sales. 

Cognizant acquires Contino

17 October

Professional services giant Cognizant revealed plans to buy technology consulting firm Contino in April.

Contino is an AWS global premier partner with some 350 employees in Australia, the UK, and US.

Cognizant CEO Brian Humphries said Contino’s holistic cloud capabilities would help his company offer and more readily deploy transformation cloud-based solutions.

Contino’s co-founder Matt Farmer on the other hand said joining Cognizant would allow the company to scale its offerings globally and offer a richer portfolio of cloud capabilities.

Read the full story here.

ASI Solutions targets Canberra with Forward IT acquisition

8 October

ASI Solutions snapped up Forward IT, making no secrets that it had Canberra in its sights.

Canberra-based Forward IT provides managed services, specialising in ICT design, implementation and support to government, SMB, education and non-profit customers.

“We have identified Canberra as an area where we need to grow, and Forward IT’s strong team gives us the opportunity to rapidly build that growth,” said ASI managing director Nathan Lowe.

“The acquisition will give ASI access to additional government business to grow our public sector portfolio along with additional managed service growth, and will give us the additional volume to provide scale to our product and managed services offerings.”

Forward IT came in at No.5 in the 2019 CRN Fast50, for the financial year before it was acquired.

Read the full story here.

DWS saves Object Consulting

26 September

ASX-listed services provider DWS snapped up Sydney channel player Object Consulting ahead of liquidation.

CRN broke the news that Object Consulting had gone into voluntary administration in September with debts topping $10 million, leading administrators to suggest the company be wound up.

DWS CEO Danny Wallis specific that the acquisition was consistent with his company’s strategy to diversify earnings and increase its exposure to state governments.

Read the full story here.

CRN IMPACT Awards winner Cohesio bought by German conglomerate

24 September

Melbourne-based voice-controlled and robotics software solutions provider was bought by Körber, a German technology conglomerate.

Cohesio won the Evolving Innovator award at the 2018 CRN Impact Awards in recognition of Ignito, its software for enabling workflow optimisation and task automisation that was deployed to My Chemist stores Australia-wide.

Körber has interests in numerous businesses and industries, but most relevant to Cohesio is its logistics businesses. Körber said in a press release that Cohesio will complement its existing voice solutions.

Read the full story here.

5G Networks buys data centre players

12 September

Broadband network operator 5G Networks made two acquisitions on its way to topping the CRN Fast50. The first was in April with the $5.7 million acquisition of Melbourne Data Centre.

The buy was part of 5G Networks’ strategy of expanding its infrastructure footprint and to improve connectivity between its cloud offering and broadband network. MelbDC’s facility, located in the Melbourne CBD, holds 330 racks and hosts 4.5 megawatts of equipment, operating at 40 percent capacity at the time.

The other acquisition was another data centre business – Sydney-based Australian Pacific Data Centres. 5G Networks splashed $3.5 million for the colocation provider, which owned a facility with a capacity of more than 150 racks at 30 percent utilisation.

Read the full stories here and here.

MOQ finalises Wardy IT purchase

4 September

MOQ Limited finalised the purchase of Wardy IT in September for a price tag of $2 million in cash and $4.4 million in shares.

The deal significantly extended MOQ’s reach and capabilities. The company’s lead services brand – MOQdigital – has a presence in Sydney, Brisbane and Sri Lanka, while Wardy operates from the same Australian locations, plus Adelaide, Canberra and Melbourne.

Wardy also brought expertise in databases and analytics that MOQdigital couldn’t match at the time.

Read the full story here.

EQT buys stake in Nexon Asia Pacific

1 August

Global investment firm EQT bought a majority stake in Sydney’s Nexon Asia Pacific.

Founded in 2000, Nexon provides end-to-end managed IT services focusing on cloud, secure networks, unified communications, managed security, business solutions and digital workspace solutions.

Terms of the acquisition weren’t disclosed, and EQT gave a glimpse of plans for Nexon, saying it will further develop Nexon’s IT services, grow its customer base and seek out more acquisition targets. EQT will also provide Nexon with capital and capabilities for rapid growth.

Read the full story here.

MSY to be bought by mining company

8 July

No-frills reseller MSY finally seale a deal to be acquired by former listed mining company Lanka Graphite Limited.

The two had been in discussions on a transaction since August 2018, but in December 2018, Lanka revealed that it planned to exit the mining business and pivot to e-commerce instead. This would effectively result in a reverse listing, allowing MSY to trade on the ASX.

Read the full story here.

Spirit Telecom makes multiple acquisitions 

Spirit Telecom bought four companies in 2019.

Starting in April, Spirit paid $5.7 million to buy fixed wireless broadband provider LinkOne Networks, expanding its telco presence and offerings to channel partners.

The following month, Spirit bought wholesale telco carrier Building Connect for $300,000, expanding its presence in Sydney with a fixed wireless network that covered 31 buildings and business parks.

In July, Spirit added managed services provider Arinda IT. For $2.6 million, Spirit acquired Arinda’s 12-person team with 300 customers in Sydney, northern NSW, Melbourne and Perth.

Finally a month later, Spirit bought its second MSP with Melbourne’s Phoenix Austec in a bid to strengthen its SME-focused managed services business. Spirit decided to integrate Phoenix into Arinda IT to create a single managed services provider, which now represents around 20 percent of Spirit’s overall revenue.

Read the full stories here, here, here and here.

Modality Systems acquired by UK-based GCI

4 June

One of Microsoft's biggest Skype for Business partners Modality Systems was acquired by UK-based converged ICT services provider GCI.

The deal establishes a local presence for GCI through Modality’s Sydney office, as well as a North American presence through its Seattle office.

Modality Systems was founded in 2007 and landed in Australia in 2014 after a few years of doing business in the country. Justin Norris led the expansion as country manager, a role he held until July 2018, when he returned to work at Modality's headquarters at Hertfordshire, UK.

Read the full story here.

Arq Group offloads wholesale domain business

20 May

Arq Group sold its wholesale domain business TPP Wholesale to UK-based domain registry CentralNic Group for $24.4 million.

The sale came as the former Melbourne IT looks to shed non-core businesses as it focuses on digital solutions.

The proceeds of the sale will be used to pay down debt and provide balance sheet flexibility.

There could be an even bigger acquisition for Arq in 2020 though, as VentraIP and Servers Australia made it known they were interested in buying the struggling company.

Read the full story here.

Fone Dynamics acquired by Uniti Wireless

1 May

Brisbane-based Fone Dynamics was acquired by Adelaide-based telco Uniti Wireless for up to $8.4 million.

The communications platform-as-a-service company and 2018 CRN Fast50 finalist will also help Uniti expand into Queensland, while co-founder Jordan Grives joins the telco’s executive leadership team.

Fone Dynamics has a proprietary communications platform-as-a-service, focusing on inbound voice and business-grade SMS services.

The deal is expected to be completed on 1 June 2019, subject to regulatory approvals.

Read the full story here.

Tesserent acquires Melbourne Splunk partner Rivium

18 April

Managed security specialist Tesserent acquired enterprise security specialist and Splunk partner Rivium for $3.2 million.

The acquisition followed Tesserent’s earlier decision to cancel its plans to acquire Melbourne-based managed services provider Asta Solutions as it looks to focus on security.

Rivium, which has offices in Melbourne, Sydney, Brisbane and Canberra, adds a Security Information Event Management (SIEM) to Tesserent’s cybersecurity offerings.

Read the full story here.

MYOB approves takeover bid

3 April

MYOB investor Manikay Partners changed tack on a proposed takeover by investment firm Kohlberg Kravis Roberts & Co (KKR), agreeing to approve the proposal.

The hedge fund notified MYOB chairman Justin Milne that it will vote for the proposed $2 billion acquisition by KKR, unless a superior offer comes along.

KKR finalised the acquisition on 9 May.

Read the full story here.

Versent snaps up fellow AWS partner Contexti

26 March

Versent acquired fellow Sydney-based AWS partner and big data solutions specialist Contexti.

Contexti was founded in 2012 and boasts more than 100 enterprise customers, including Caltex, Seven West Media and SAI Global.

Contexti bills itself as an 'actionable insights' business, specialising in providing autonomous analytics with machine learning and AI. Its vendor partners include AWS and Microsoft Azure. Versent is no stranger to Amazon itself, having been named AWS' top consulting partner of the year two years in a row.

Read the full story here.

Complete PC Solutions buys ITialise

20 March

Complete PC Solutions acquired the customer base of fellow Melbourne-based IT provider ITialise.

ITialise had worked with Complete PC Solutions since not long after its 2011 founding. When its directors decided to exit the business, they turned to Complete PC Solutions to continue tending to its customers.

The acquisition included 30 customers, half of which are in the property development industry. 

Read the full story here.

Deloitte acquires Splunk partner Converging Data

14 March

Deloitte is no stranger to acquiring Australian IT companies, made even more obvious when it snapped up Sydney-based Splunk partner Converging Data.

The company joined Deloitte’s Risk Advisory practice as part of the deal, with 9 staff joining and managing director Stuart Hirst taking on the role of risk advisory partner for the professional services firm.

Converging Data specialises in using data analytics for enterprise level risk and operational management, using Splunk to converge IT operations, security orchestration and response, application analytics, cyber security and IoT monitoring.

Read the full story here.

Officeworks buys PC repairs and tech support provider Geeks2U

4 March

Officeworks acquired Sydney-based PC repairs and tech support provider Geeks2U.

Geeks2U provided hardware and software repairs, security solutions, wireless and wired networking services, virus and spyware prevention and removal, data backup and recovery solutions for PCs and Macs.

Officeworks managing director Sarah Hunter said the acquisition was part of the retailer’s strategy to expand its offerings to “better meet customers’ needs” and complement its existing products and services.

Read the full story here.

AWS partner Cloudten bought for $8.6 million

4 February

Transaction Solutions International (TSN) completed the acquisition of Sydney-based cloud and security service provider Cloudten.

TSN payed an initial $3 million for Cloudten, plus another $5.6 million to be paid in tranches over 12 months.

Cloudten is an AWS advanced consultancy partner with competencies in government and security. The company raked in $3.8 million in revenue in the year ending 30 June 2018, for $1.6 million in net profit. For its efforts, Cloudten placed No.4 in the CRN Fast50 for 2018, growing 155.16 percent in FY17-18. That year also saw Cloudten more than double its headcount, score a place on the UK government's digital marketplace and win work with major public sector agencies.

Read the full story here.

Powernet and Evolve IT merge

9 January

Sydney managed services provider Powernet IT solutions merged with Evolve IT Australia.

The companies revealed the move at the start of January, announcing that the businesses would combine to create a managed services powerhouse with a combined 50 years of experience.

The new entity said it was now a multi-national SMB and mid-market services provider with a team of more than 90 people, located in six offices across Australia and New Zealand. 

Read the full story here.