ASX-listed BigAir Group (ASX:BGL) has acquired managed IT services provider, Oriel Technologies.
The total price of the acquisition is capped at $15 million and consists of $4.21 million upfront cash consideration and two additional earn out payments based on Oriel’s performance in FY15 and FY16.
During FY14 Oriel generated $22 million in revenues and earnings before tax of $842,000.
According to a statement to the ASX, Oriel is expected to grow its revenues to more than $25 million in FY16.
Oriel will operate as a wholly owned subsidiary within BigAir Group.
“By acquiring an organisation of Oriel’s size and capability, we anticipate a significant boost in our Cloud and managed services business, which has been identified as a key growth sector for us,” BigAir CEO, Jason Ashton, said. “Oriel has extensive experience in assessing business technology requirements, building and managing technology solutions, developing business continuity and disaster recovery plans, and assisting customers to migrate to the cloud.”
Oriel founder and managing director, Jake Wynne, said the acquisition presented a fantastic opportunity to expand its managed services reach.
“Over the last 19 years, we have built a great team of people focused on providing creative and cost effective technology solutions and excellent service. The fact that a number of our customers have been with us for more than 15 years is a testament to that service,” Wynne said.
Oriel CEO, Chris Fydler, said during the past three years, the company has worked hard to rapidly adapt to the changing technology marketplace.
"The industry wide expansion of Cloud-based services has meant our customers are demanding we replace our traditional project-based solutions with managed services," Fydler said. "As a result, we have made significant investments in infrastructure and people to provide a comprehensive suite of managed services to our customers."
Oriel’s managed services portfolio consists of networking, systems, communications, support, infrastructure-as-a-service, and private, hybrid and public Cloud.
BigAir stated it has achieved financial success with similar strategic investments in the Cloud and managed services markets through previous acquisitions of Intelligent IP Communications, Star-Tech Communications and Anittel Communications.