Details emerge on Logicalis' acquisition of Thomas Duryea

The merger of homegrown systems integrator Thomas Duryea Consulting and globally owned Logicalis Australia will create a $120 million company billed as "one of Australia’s greatest integrators".

CRN broke the news of the acquisition overnight, as Logicalis took 100 percent ownership of the Melbourne-headquartered IT firm in an all-cash deal for an undisclosed sum.

It creates a powerhouse in the channel with credentials from the desktop to the data centre, and expertise in storage, cloud, networking, security and ICT services.

Logicalis is a major Cisco partner, while Thomas Duryea is renowned for driving the growth of VMware in Australia, as well as a long history with Microsoft, and has been heavily focused on major Windows 10 rollouts.

Owned by South African-headquartered giant Datatec, Logicalis brings "access to competitive financing", said Andrew Thomas, chief executive of Thomas Duryea.

The merger also adds Logicalis People, "which provides a flexible resourcing model for contract or project staff", said Thomas in an email to customers.

Thomas wrote that "Thomas Duryea Consulting will join together with Logicalis Australia to create one of Australia’s greatest integrators".

According to a blog from Logicalis, Thomas Duryea brings "consulting services, including IT disaster recovery planning and the development of IT Infrastructure roadmaps".

In an email seen by CRN, Logicalis Australia chief executive Basil Reilly said that "Logicalis and Thomas Duryea have a similar culture of technical excellence and customer relationships".

The Thomas Duryea brand will remain in the market for the next 18 months and "operate as a Logicalis Group company", Oliver Descoeudres, Logicalis Australia marketing director, told CRN.

"Two job roles at Thomas Duryea will be covered by existing Logicalis employees; all other employees will stay in their current roles and we expect both organisations to hire additional people based on our growth plans," said Descoeudres.

TD's Thomas and Logicalis Australia CEO Reilly will keep their current job titles, he added.

Logicalis and Thomas Duryea are significant players in the Australian IT industry, though both posted less than stellar results in their most recent financial reports, according to data from corporate regulator ASIC.

Logicalis saw revenues fall nearly $16 million, or 23 percent, year on year to $53.2 million for the 12 months to 28 February 2015.

Thomas Duryea reported a fall of $3.2 million, or 4.7 percent, to $65.3 million, and a net loss after tax of around $7,000 for its 2015 fiscal year. In the 2014 year, the company's revenue grew almost $13 million to $68.5 million and it saw a $238,000 profit.

The merger also adds a new dynamic in the distribution sphere: Logicalis' parent Datatec also owns Westcon Group, meaning the deal brings Thomas Duryea under the same ultimate umbrella.

Descoeudres explained how this influences Logicalis' distributor mix, and what it will mean for TD.

"Where it makes commercial sense we [Logicalis] purchase from Westcon, but stock availability and other factors means that we need to work with multiple distributors. However, there are other joint strategic initiatives where we are working closely with Westcon," said Descoeudres.

"Thomas Duryea has a very different (and complementary) solutions portfolio to Logicalis, which was one of the reasons for the acquisition. They will have existing distributor agreements in place, which would include Westcon. For the same reasons we cannot purchase exclusively through Westcon, we expect TD will need a range of supplier relationships to meet their business requirements."

Datatec is no stranger to acquiring down under: back in 2000, the South African company bought LAN Systems, at the time Australia's biggest Cisco distributor.

Thomas Duryea was founded in 2000 by Andrew Thomas, Micah Smith, Evan Duryea and David Stagg.

Earlier this year, CRN broke the news that Thomas had established a new business focused on analytics. He relocated from Melbourne to Sydney in the past year and set up AtlasPlato, which is "focused on developing data-driven organisations".

The deal comes amid a frantic pace of consolidation in the Australian IT industry over the past two years, with major deals including CSC's pending takeover of UXC Limited, Deloitte's purchases of Cloud Solutions Group and Dataweave, Canon's acquisition of a majority stake in Harbour IT and ASX-listed BigAir Group buying Oriel and Applaud.