The Citadel Group is to acquire consultancy firm Noventus for $5.7 million in the hope of gaining more government projects.
Based in Melbourne, Noventus offers systems integration and engineering plus software development, logistics support and project management for a number of industries, including defence, telecommunications and transport.
It currently sits on a number of procurement panels, including the Department of Foreign Affairs and Trade (DFAT) Technical and Related Services and Department of Home Affairs Consultancy and Business Services.
Citadel will pay $5.7 million in cash for all of Noventus’ share capital, with 50 per cent of the sum to be paid upon deal’s completion, which is expected within June. Meanwhile, the remainder will be paid in three months time, the company added.
According to Citadel, the deal will expand the publicly-listed company’s service offerings and opportunities, particularly in Defence and national security, and will be immediately earnings per share accretive.
“Citadel has a successful track record of acquiring strategic bolt-on businesses that are readily integrated into the group in order to provide additional customer-centric solutions, leveraging our significant software engineering expertise,” Citadel CEO Darren Stanley said.
“The acquisition of Noventus is consistent with our traditional approach to acquisitions and increases the scale of Citadel’s DNS offering, which remains a key industry focus of the Group.”
Stanley added that Citadel will be in a “strong position” to win further significant government enterprise information management contracts.
ACT-based Citadel added that the deal’s completion is subject to “certain conditions” concerning Defence Panel Memberships.
The proposed acquisition follows Citadel’s warning to shareholders earlier this month that its annual revenue will fall to roughly $24 million, a third less than the previous year. The “disappointing” announcement came following after a number of project extensions, which were expected to start within the current financial year, delayed until the next half year.
It has also made two other acquisitions in the last 13 months: the government business of technology agency Gruden for $1.65 million in December last year and healthcare software-as-a-service vendor Anaesthetic Private Practice for $2 million in April 2018.
In February, its co-founder Miles Jakeman stepped down as director of the company as the company announced a number of new client wins.