Comms Group focusing on TasmaNet integration before further M&A

Comms Group CEO Peter McGrath has stated that although the current focus is "bedding down" the recent acquisition of TasmaNet, mergers and acquisitions is one potential lever the company is looking to pull in the future to drive growth opportunities.

The acquisition of the Tasmania-based communication and managed IT services provider, announced in May of last year, is set to be integrated into the wider company by the end of FY26/Q1 FY27.

In a recent presentation to the Australian Microcaps Conference, Comms Group stated that it's expecting "strong uplift" with the acquisition and integration, with the annualised EBITDA margin anticipated to increase post-acquisition to a run rate of between 12% to 13.3%.

The company's underlying EBITDA for H1 FY26 increased 87.3% to $4.5 million versus $2.4 million for the prior corresponding period, a figure driven not only by "exceptional growth" in its Global & Wholesale division and "strong performance" in its Secure Managed IT Services division, but also contribution from TasmaNet.

While M&A is "not a key focus currently", McGrath did share with techpartner.news the organic and inorganic opportunities the company is pursuing to increase scale and add additional capabilities in the future.

"Capabilities in the unified comms space, particularly with CX or contact centre combined with AI capabilities [plus] portal, automation and related AI capabilities, allowing us to improve customer experience and automate a lot of internal processes," he explained.

McGrath also touched on the types of companies that Comms Group is looking to acquire once M&A activity does become a focus.

"Businesses with key corporate customers and with telco type capabilities (e.g. Telco, UCaaS, contact centre, security, AI)", were identified as targets, plus "potential MSP expansion" as well.

"Possibly add-ons to our global business e.g. Singapore-based UCaaS providers with MNC (multinational corporation) customers [or ] domestic UCaaS or contact centre providers with [an] existing corporate or MNC customer base."

Asked what learnings Comms Group gained from the Tasmanet acquisition that the company can apply to future M&A activity, McGrath said while they knew that integrations and synergies take time, it's still important to concentrate and work on these as part of key acquisitions.  

"[It's] best to get individual M&A bedded down before embarking on new M&A," he told techpartner.news.

"We have been patient in this regard and have spent quite a lot of time with the integration and synergy extraction process.

"TasmaNet has some high quality corporate and Govt relationships; also some key product and technology capabilities with both private cloud to government and corporate data services. We would love to be able to add to this with similar style acquisitions."