Hubify builds out local MSP and telco play with double acquisition

Hubify builds out local MSP and telco play with double acquisition

Acquires MSP ICNE and telco telemarketing firm Smile, paying maximum of $2.75 million.

Victor Tsaccounis (Hubify)

Victor Tsaccounis (Hubify)

Credit: Hubify

Telecommunications provider Hubify has reached into its pocket to make a dual acquisition in the local IT and telco space. 

The Australian Securities Exchange (ASX)-listed company, formerly known as United Networks, is set to pay $2 million for Sydney managed service provider (MSP) ICNE, paying half cash and half shares for the company. 

According to Hubify, ICNE is likely to make more than $2.3 million in revenue and $600,000 in pre-tax earnings (EBITDA) this financial year. 

Hubify said it will retain all ICNE management and staff, including CEO John Martin, who founded the Microsoft partner in 2000. 

Providing IT infrastructure, cloud solutions and backup, ICNE also counts the likes of VMware and Google Cloud Platform among its vendor partners. 

“The [ICNE] team will form an important part of HFY’s expanded team delivering full-service telco/MSP solutions to the company’s customer base going forward,” Hubify said. 

Meanwhile, Hubify’s CEO Victor Tsaccounis noted that the acquisition was the company’s first in the MSP space.

 “This is a significant milestone in our growth plans for the company,” he said. “I look forward to John and the ICNE team joining Hubify to deliver on our vision to empower people and business through technology.” 

In addition to ICNE, Hubify has also acquired telemarketing company Smile, for which it will pay between $250,000 and $750,000. 

The deal is a 100 per cent earn-out based on FY22 EBITDA, with the final sum will be paid after the end of the next financial year, half in cash and half in shares.  

According to Hubify, Smile’s FY21 results will be in excess of $1.7 million in revenue and $300,000 normalised EBITDA. 

Hubify has been a customer of Smile for eight years and said it will retain the company’s executive management – a sole shareholder – and staff as part of the acquisition. 

Hubify expects to extract $200,000 in synergies from the merging of the company’s lead generation team into the Smile business in FY22. 

As well as Hubify, Smile also counts Vodafone and Optus among its customer base. 

“Both acquisitions are important for the company as they support our dual-pronged strategy to grow the business both organically and through new acquisitions in the Telco and IT space,” Tsaccounis added. “We continue to work through our acquisition pipeline, and I look forward to updating the market as more acquisitions are completed.” 

The deal comes just a handful of months after Hubify acquired Net Hoster's telco customer database for $800,000 in cash in order to expand into Queensland. 

It also recently launched a managed cyber security services offering, ‘CyberHub’, after striking a $500,000 investment in cyber security services provider Internet 2.0. 

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Tags AustraliaSmileUnited NetworksHubifyICNE

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