NCS Group acquires Melbourne's Arq Group for $290 million

Melbourne-based digital services company Arq Group has been acquired by Singapore-headquartered NCS Group for $290 million.

The company is the Singtel subsidiary’s fourth local acquisition in 15 months as part of its plans to expand further into Australia through its NCS NEXT digital innovation and services arm.

Since December 2020, NCS has acquired Dialog Group, Google Cloud consultancy Riley and a majority stake in 2020 Fast 50 No. 4 Eighty20 Solutions.

Arq Group is expected to bring in an additional 560 staff to NCS and boost its headcount to 1,900 across Australia.

“This latest acquisition completes a jigsaw of strategic investments in Australia, ramping up our presence in a market that is critical to our regional expansion. Combined with Dialog’s core IT capabilities and extensive reach across 8 Australian cities, ARQ brings onboard the right digital competencies that help create a highly compelling end-to-end digital transformation value proposition,” NCS Group chief executive Ng Kuo Pin said.

“Taken together, our four investments to date have given us the necessary scale, capabilities and credibility to compete as a regional digital powerhouse as we help governments and enterprises in Singapore and Australia achieve their digital transformation goals.”

Arq Group traces its origins to web hosting company Melbourne IT, which adopted the name in 2018 after a restructuring. Its enterprise business was sold to a consortium that included Sydney-based investment firm Quadrant Private Equity for $35 million in 2020, along with the Arq Group name.

The old company has since rebranded to Webcentral, which was later acquired by ASX-listed 5G Networks.

Arq Group chief executive Tristan Sternson said, “Joining the NCS family is a tremendous opportunity to continue growing the business as it now allows us to go international and serve regional clients besides capturing more domestic market share by leveraging synergies within NCS.”

“We are well primed for expansion, having grown our government footprint to over a third of our business, acquired many new customers and hired 300 new talents on board. We intend to keep optimising NCS’ world-class IT and digital capabilities to keep building innovative solutions for our clients.”

NCS said the acquisition is subject to the receipt of the relevant regulatory approvals and is expected to complete by May 2022.