CSO Group and xAmplify call off merger

A 2024 merger between Perth's CSO Group, a Fast50 company, and xAmplify has fallen through, after what a spokesperson for the latter company said was a thorough review.

The merger was announced a year ago, with MARQ1 set to become the country's largest home-grown integrated cyber security and artificial intelligence (AI) services group.

At the time, the merged entity would have a gross turnover of $100 million a year.

However, after the review in the second half of 2024, "both parties agreed not to proceed with the merger," the spokesperson said.

"Instead, both companies opted to return to a strategic partnership model that better reflects our respective strengths and focus areas.

"While the merger did not proceed, both companies maintain a strong partnership and collaborate on a strategic basis where relevant."

CSO group founder and chief executive Michael Simkovic was to lead MARQ1 in the same capacity; meanwhile, Wayne Gowland, chief executive of xAmplify, would become the chief operating officer of MARQ1.

At the time of the announcement Howard Fyffe was appointed as chief revenue officer (National), while Tom Scicluna was to serve as chief revenue officer (Federal).

Macquarie invests in xAmplify

The cancelled merger came to light after xAmplify secured minority equity investment from Macquarie Capital Principal Finance to fund national expansion and potential acquisitions.

The Canberra-based company provides AI and automation services to federal government departments including Health and Aged Care, and Climate Change, Energy, the Environment and Water, and the Australian National Audit Office.

xAmplify would not disclose how much money it has received from Macquarie Capital.

"While we're unable to disclose the exact value of the investment at this stage, we can share that it represents a significant minority growth investment from Macquarie Capital Principal Finance," the spokesperson said.

"This backing will help accelerate our national expansion and strengthen our ability to deliver secure, AI-enabled, human-centred digital transformation services to government and enterprise clients."

"Australia's digital priorities are shifting fast. From sovereign data management to AI adoption, we need scalable, smart infrastructure and solutions that are built and delivered by people who understand the local context," chief executive Wayne Gowland said.

Newton Gillies, Macquarie Capital's head of principal finance APAC, said xAmplify's expertise aligned with capabilities needed to drive continued digitisation for Australian businesses and government entities.

"We are excited to be partnering with the xAmplify team on the next phase of their growth," Gillies said.