Sydney's EFEX Group sells 50 percent stake to private equity firm Alceon PE for $30 million

Sydney managed technology services provider EFEX Group has sold a 50 percent stake to Australian private equity firm Alceon Private Equity for $29.5 million.

Announced at the end of 2021, the investment is Alceon's fourth acquisition for the year and its first in the managed IT services sector. EFEX chief executive and founder Nick Sheehan will retain the remaining 50 percent stake of the company.

Founded in 2013, EFEX specialises in printer and managed IT services to regional small businesses. It boasts 18 offices across Australia’s east coast and some 4200 customers.

“We have continually outperformed to date but for the next phase of growth we were looking for a capital partner, not just a source of capital,” Sheehan said.

“We are delighted to be partnering with Alceon Private Equity for the next phase of growth. Their track record across both PE and other investment strategies demonstrates their desire to work with successful business founders to grow businesses, rather than just take them over.”

Sheehan added that EFEX can triple its EBITDA by FY2026 through its ongoing conversion of print customers to managed IT services customers, an upcoming internal warehouse facility, new customer acquisitions and further mergers and acquisitions.

As part of the deal, EFEX also has an earn-out incentive payment of up to $4.8 million, subject to the delivery of forecast Technology Revenue and EBITDA for FY2022.

Alceon Private Equity co-head Zac Midalia said, “Nick and his team have established an irreplaceable regional footprint and very strong built-in growth potential for its high value managed IT services offering.”

“EFEX is well placed to take advantage of the growth in Australian regions by being focused and innovative in supporting small business clients in their technology evolution.

“The company has had very encouraging success in the transition from print to managed IT services and with 4,000+ recurring revenue customers and an insightful founder, is positioned well to dominate regional and SME managed IT services.”