WA-based Empired acquires OBS as it grows eastwards

Picks up OBS for $15m and a new mining company contract worth $50m

Fast growing WA-based IT services provider Empired has picked up east coast Microsoft specialist OBS for $15m.

It raised $15.5m for the acquisition and simultaneously announced a new $50m program of work with a global resource/mining company.

The OBS acquisition gives Empired a significantly stronger presence in Sydney, Brisbane and Adelaide, alongside its established bases in Melbourne and Perth.

Founded in 1999, Empired's net profit has grown from $200,000 in FY2011, to $2.1m in 2013.

Managing Director, Russell Baskerville, said that the acquisition makes "Empired as a major provider of IT services with a genuine national presence across Australia."

OBS's strengths are in content management, collaboration and business intelligence.

The acquisition adds 150 new staff to Empired existing pool of 300.

“The addition of OBS is complementary to our prior acquisition of Conducive, which was an initiative to diversify into application development and consulting to complement our strong infrastructure managed services business. OBS significantly enhances that capability in the Microsoft web content management and CRM space where we are seeing strong demand," Baskerville said.

The company said the $15.5m in capital raised was to partially fund the OBS acquisition, with the remainder for general working capital. It called a trading halt last Thursday ahead of the announcements.

Empired has also announced a three-year contract with an as-yet-unnamed resources company to design, develop and implement new core operational mining systems, replacing legacy technologies. Empired's work will be to build a new system to track iron ore volume and grade through the entire mine and logistics process.

Baskerville told the ASX that the announcement is a big step for the company.

“This program will launch Empired into a new league in large operational systems development and ensure our ability to successfully compete on new multi-million dollar applications contracts. Accordingly our focus will be on delivering an exceptional service and providing a strong business outcome for both organisations," he said.

“The contract will ramp up immediately, subject to ongoing approvals, providing an exceptional growth platform for FY14, positioning us well to continue to demonstrate a strong organic growth track record.”

Allan Swann is a Senior Editor at IDG Communications Australia. Follow Allan on Twitter at @allanswann.

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Tags OBSRussel BaskervilleMicrosoftMining resourcesempiredIT services provider

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