ASX-listed IT firm Empired has bought local IT firm Intergen for A$17.4 million in cash and shares to build the biggest trans-Tasman Microsoft services provider.
The Perth-based company will pay A$1.8 million in cash and issue 4.3 million shares upfront, with a further A$12.4 million in cash earn-outs over the next three years, to buy the privately held New Zealand firm, it said in a statement to the ASX. The acquisition will add A$60 million in annual revenue to Empired, and the Australian firm anticipates annual revenue of between A$145 and A$165 million in the 2016 financial year.
"This is a transformational acquisition for Empired," managing director Russell Baskerville said in a joint statement. "It strategically positions Empired as the largest provider of Microsoft- based application services in the Australasian region and cements us as a leader amongst our ASX-listed peers in scale, capability and geographic reach."
Empired raised A$10.5 million in a share placement last month, which it said would be used to fund future acquisitions to increase the breadth and depth of its IT services.
Wellington-based Intergen's 370 staff in New Zealand and North America will be retained in the enlarged Empired, while its Australian offices will be merged with the Australian firm's existing operation. The local IT firm's management has committed to staying with Empired for the next three years.
Intergen's chief executive and its biggest shareholder, Tony Stewart, said Empired articulated its strategy to identify key opportunities in a market undergoing a structural shift, and said he believed the "transaction will result in a great success for all our key stakeholders."
The New Zealand company counts Microsoft as its biggest client in terms of contractual value, and has 11 contracts worth at least A$1 million.
Shares of Empired last traded at 73 Australian cents, valuing the company at A$80.2 million.
(BusinessDesk)
Paul McBeth
Tue, 21 Oct 2014
Tue, 21 Oct 2014
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