Australia’s third quarter is often the most challenging for all businesses as Christmas and school holidays send activity into a temporary hibernation.
However, despite this and growing fears of the economic impact from the coronavirus pandemic, mergers and acquisitions (M&A) activity has been as busy as ever, with at least 20 channel or technology companies swallowed in the past few months.
January saw Powernet Group continue its two-year tradition of hailing the New Year with a new addition by acquiring Victorian cyber security provider Paisley Group. The deal gave Powernet access to Paisley’s IT security services and solutions, plus its vendor relationships with Avast, Trustport Antivirus Software, KnowBe4, Ecosite Web Hosting and Backup MyWebsite.
That same month, Sydney-headquartered telecommunications service provider Next Telecom Group made a quartet of acquisitions in Melbourne to boost its regional presence. These included Next Business Telecommunications, Business Class Telecom, Nextalk and WireNetworks, all of which are National Broadband Network (NBN) resellers.
Still in the telecommunications world, Spirit Telecom continued its 2019 acquisition train into 2020 with the purchase of managed IT services business Cloud Business Technology (Cloud BT). Paying $700,000 for the company, the deal marked the third MSP acquisition by Spirit, having bought Arinda IT and MSP Phoenix Austec last year.
The following month was a busy period in terms of deal-makers. Citadel Group subsidiary Kapish got the trend going when it acquired Sydney’s Linked Training. Kapish, which specialises in Micro Focus Content Manager systems, claimed Linked Training formed a bid to deepen its capabilities in its primary area of focus, while enhancing its training offerings.
A day later, Melbourne-based Cisco Premier partner Xlate Group entered the US market through a merger with SolarWinds partner Loop1 Systems. According to Xlate CEO Anthony Bettanin, the merger will create the first global SolarWinds partner with coverage across all major regions.
On the reverse end, that same week saw a US-based systems integrator, Convergint Technologies, make a bid for greater space in the Australian market, acquiring Perth-based system integrator Cerberus Technologies. Convergint has partnerships with the likes of Axis Communications, Genetec, Honeywell and Milestone, and first entered the local market via another acquisition, that of Port Melbourne-based Integrators Australia, in 2018.
In what was a busy first week of February, Koch Equity Development also made a move to acquire the remaining equity stake in Infor, which was held by Golden Gate Capital, for US$13 billion. Although a global deal, Infor has a wide footprint in Australia, with offices spanning Sydney, Melbourne, Gold Coast and Adelaide.
Later that month, major Australian channel player ASI Solutions bolstered its trans-tasman presence with BEarena, a specialist provider of virtual infrastructure, public and hybrid cloud solutions, managed services and back-up and disaster recovery platforms.
Hot on the heels of being partially acquired by a Swedish private equity firm six months earlier, Nexon Asia Pacific stepped up its own M&A activity with a trio of deals: Remagine Solutions, XCentral and Kiandra IT's technology and security solutions division.
5G Networks, another major purveyor of M&As, also stepped up its activity in February, purchasing Servers Australia's North Sydney data centre (NSDC) for $2 million. The deal marked the Melbourne-based carrier’s third major data centre acquisition in 12 months, bringing its total data centre rack numbers up to 720.
Spirit Telecom also showed no signs of slowing down its acquisition spree in 2020, coughing up $6.9 million to buy two Melbourne managed services providers: Trident Business Group and Neptune Managed Services. The deal saw it launch a new business unit, Trident IT Solutions.
After a two-week lull in activity, Accenture closed off February with the purchase of Australian consultancy AlphaBeta Advisors, which specialises in business strategy, data analytics and econometrics.
The third month of 2020 began with digital business transformation business Publicis Sapient announcing its acquisition of Australian consultancy Third Horizon.The deal gave the Boston-headquartered company access to Third Hoizon’s clients, which span federal government, the NSW and Victorian state governments and enterprises such as Lendlease, Powerco New Zealand and Ausgrid.
That same week saw another overseas company, India-based digital transformation outfit, Sonata Software, double down in Australia, picking up GAPbusters (GBW). According to Sonata CEO Srikar Reddy, the purchase of the Melbourne-based customer experience management provider “reaffirmed” its platform-led approach to digital transformation.
Accenture, meanwhile, carried on its February activity into March with the acquisition of Context Information Security. Founded in London, Context has offices in Sydney and Melbourne and will enable Accenture to ramp up its cyber security offering.
Another global deal to hit home in Australia came the following week when NetApp acquired software-defined storage service provider Talon for an undisclosed amount.
Talon, which first launched a base in Australia and New Zealand in 2018, will now see its software integrate with NetApp Cloud Volumes and Azure NetApp Files solutions.
March 17 saw a duo of deals hit the headlines, staring with Deloitte, which acquired Melbourne-based cyber security provider Zimbani.
The local cyber security specialist's CEO and co-founder Rene Morel will join Deloitte as partner, alongside co-founder and chief security architect Jason Paul.
At the same time, ASG Group acquired Canberra-based professional services firm Group 10 Consulting. The company was founded by Cosimo Garreffa and Jennifer Nelson in 2013, who will continue to lead the team under the Group 10 brand while providing customised solutions for the ACT market.
Not letting its reputation for being a major M&A player slide, Deloitte also carried on its activity into March, boosting its Brisbane team with IBM partner Bistech. A data analytics consultancy and financial performance management provider, Bistech has 17 consultants, who will join Deloitte, and also has partnerships with Microsoft and Adaptive Insights.
The month drew to a close with Capgemini snapping up Sydney-headquartered MuleSoft consultancy WhiteSky Labs. The deal will see 150 digital transformation specialists MuleSoft join Capgemini, giving it access to clients ranging fro, Energy Australia, Mynt, Blackmores, Qantas and 7-Eleven.
Unsurprisingly, as the COVID-19 pandemic saw much of Australian business either go into hibernation or grind to a halt, M&A activity has remained so far slow. However, hyperscale data centre provider Airtrunk proved an exception when Macquarie Infrastructure and Real Assets (MIRA) closed a deal for an 88 per cent stake in the company.