M&A blog Sept 23: Busy M&A activity in Services

2. Egis signs agreement to acquire Omada Rail Systems, strengthening its rail expertise in Australia

Egis has signed an agreement to acquire Omada Rail Systems, a leading railway signalling project management and engineering services provider across the Australian Rail industry. Omada Rail Systems was founded in 2016 by Luke Craven, Mark Hadfield and Christopher Miller through a mutual desire to provide high-quality and value for money services to the Australian rail market. Omada’s team offers a diverse range of backgrounds and skill sets within the Rail Signalling and Telecommunications industry. This highly specialised capability is in high demand in the current ANZ market. Egis is currently working on a number of flagship projects in Australia and New Zealand, notably the City Rail Link in Auckland (NZ), the Queensland Train Manufacturing Program in Queensland and the High Capacity Metro Train in Victoria. The acquisition of Omada Rail Systems will strengthen Egis’ rail offering, particularly in signalling and telecommunications, as it will enable it to offer it the full range of Rail services and expertise across the region.

3. Consolidated Property Services (Aust) Pty Ltd’s divestment to The Bidvest Group Limited

The Australian provider of integrated property services, Consolidated Property Services (Aust) divestement to The Bidvest Group Limited: The acquisition of Consolidated extends Bidvest’s entry into the Australian market following the firm’s purchase of BIC Services in July 2022, with Bidvest now operating a diversified facility services platform supported by over 6000 employees. This acquisition of Consolidated is aligned with Bidvest’s intention to expand its international presence in facilities management, and will add size and scale that will benefit all stakeholders.

4. Fujitsu strengthens delivery capabilities buying Canberras MF & Associates

The purchase aims to strengthen Fujitsu’s management, technology and cyber security consulting capabilities, particularly within the public sector and healthcare industries in Australia. Founded in 2019, MF & Associates marks Fujitsu’s fifth acquisition since 2021 in the Australia and New Zealand region as part of a strategic global plan to strengthen business delivery capabilities in key areas. MF & Associates will complement Fujitsu’s acquisitions of Microsoft specialist oobe and cyber security firm InPhySec, both of which took place in 2022, to bolster Fujitsu’s security offerings in Australia. The latest acquisition marks an important development in the strategy for Fujitsu Uvance, which focuses on the resolution of societal issues and contributes to customer growth through cross industry digital solutions. The vision for Fujitsu Uvance includes a significant expansion of its consulting capabilities of up to 10,000 dedicated staff by fiscal year 2025 to create an organisation that can address customers’ business issues and propose solutions and offerings, as well as execute on delivery at scale.

5. Atturra to acquire Perth-based Cirrus in $50 million deal

Ambitious Australian IT consultancy Atturra has made two acquisitions in the space of a week, headlined by the almost $50 million purchase of Perth-based managed services provider Cirrus. Having hinted at a large, upcoming acquisition in its most recent annual financial report, IT services and consulting firm Atturra has made a $50 million play for Perth-based managed services provider Cirrus Networks. The latest acquisition in Attura’s ongoing spree follows less than a week after the announcement of another purchase, Sabervox of Newcastle, and on the back of record annual revenues which jumped by 32 percent to $178 million. Cirrus was founded in Perth in 2012 by former Dell executive Frank Richmond (who departed in 2017 and is now based in the UK), before being listed on the ASX three years later with recognition on Deloitte’s annual Tech Fast 50 list for 2015. The company pulled in $112 million in revenues of its own over the past financial year, and was previously a takeover target of Webcentral before the latter sold off its 18.5 percent stake for $5.5 million last year.

6. BlueRock adds Arthur Advisory as it pursues capital partner

Keen on continuing a recent growth spurt, professional services firm BlueRock has brought on board fellow Melbourne outfit Arthur Advisory, and has confirmed it’s on the hunt for a strategic capital partner. Melbourne-based business consultancy BlueRock has added Arthur Advisory to its accounting division. The move represents a homecoming for Arthur managing director Ricky Jessop, who was a manager with BlueRock in its earlier days before departing in 2018 to establish his own business focused on high-growth start ups. A certified Chartered Accountant, Jessop originally joined BlueRock’s accounting division in 2013 and spent over five years with the firm prior to going out on his own. During his time with the firm, Jessop was involved in a number of small-scale start-ups – from superfood blends to a supportive social network to disposable hip flasks – and has since completed a Master’s of Enterprise with Melbourne University. The deal also comes amid reports BlueRock is in the market for a capital injection to supercharge the firm’s growth, with the potential of an outright sale not entirely off the table according to the AFR.

7. IFM’s PE unit splashes $80m on software firm Tally Group

IFM Investors’ private equity unit has invested $80 million into software business Tally Group, which specialises in administering and billing for customers who use the grid for drawing and sending power. The transaction comprises a $45 million investment that can be drawn immediately, while $35 million is reserved for future growth plans, Adrian Kerley, an executive director at IFM told The Australian Financial Review. IFM’s interest in the business comes as energy consumption shifts towards sources such as electric vehicles and solar panels. The software needed to service renewable power has also evolved to suit an energy grid focused on decarbonisation. Tally Group builds software around automated billing and customer service for utilities. The software-as-a-service product counts more than 110 companies as clients in Australia, New Zealand, Japan, the Middle East, India and the US, including EnergyAustralia and New Zealand’s Genesis Energy, among others. In exchange for the $80 million investment, IFM will pick up about 40 per cent to 50 per cent of the equity in Tally Group alongside existing private equity backers Silver Tree and Pioneer Capital, both of which remain investors. IFM’s investment will not increase debt at Tally Group, which stands at about $30 million. Revenue was estimated at more than $40 million, valuing the company at about $150 million to $200 million.

8. Atturra steps up regional play with Sabervox acquisition

Publicly listed Atturra has snapped up regional managed service provider Sabervox for up to $7.5 million. The acquisition cost is made up of $4 million in cash, $1 million in Atturra shares and an earn-out consideration of up to $2.5 million in cash subject to Sabervox achieving performance hurdles for the 12 months to 30 September 2024. Headquartered in Newcastle, Sabervox was founded in 2007 and specialises in providing managed IT services and cloud subscriptions to mid-sized customers in regional NSW. According to Atturra CEO Stephen Kowal, the acquisition expands Atturra’s managed services capabilities into regional NSW.

9. Check Point acquires Atmosec to boost SASE strategy

Cyber security solutions provider Check Point Software Technologies has acquired Atmosec, a software-as-a-service (SaaS) security start-up to boost its SASE offerings. The acquisition is expected to close by mid-September 2023. Atmosec was founded in January 2021 and has 17 staffers specialising in the discovery and disconnection of malicious SaaS applications, preventing risky third-party SaaS communications and rectifying SaaS misconfigurations. Atmosec’s technology can also provide visibility into authorised and unauthorised SaaS applications, as well as enforce multi-factor authentication (MFA) to access applications. Check Point aims to integrate Atmosec’s technology into its Infinity platform to offer SaaS security with continuous SaaS posture management, prevention of malicious communications (SSPM) and a full security stack for SaaS apps including threat prevention, data protection and adaptative zero-trust access controls for both users and devices (CASB). New capabilities will be incrementally released based on roadmap milestones and organisations will be able to tap on these enhancements from the current Check Point Infinity platform.

10. ServiceNow acquires the IP of Enables Toolbox OHamp;S technology

Digital workflow provider ServiceNow has bought the Toolbox OH&S technology assets from Enable Professional Services, a Fujitsu company. The ServiceNow Elite partner created ToolBox OH&S which is native to the Now Platform, in 2018 with a vision to plug the health and safety gap in the platform offering. With ToolBox OH&S integrated into the Now Platform, customers can create safer, more connected and compliant workplace experiences on the intelligent end-to-end platform for digital transformation.  Financial terms of the deal were not disclosed. This acquisition is the latest step in accelerating ServiceNow’s existing health and safety offerings for a more comprehensive, end-to-end product. With Enable, a Fujitsu company, technology natively built on the Now Platform, the acquisition will also enhance solutions across field service management, incident and risk management, customer service, and environmental, social, and governance (ESG) management.

11. J.D. Power expands automotive data and analytics portfolio in Europe and Australia with acquisition of Autovista Group

J.D. Power, a global leader in data analytics, today announced a definitive agreement to acquire Autovista Group, a leading pan-European and Australian automotive data, analytics and industry insights provider. The acquisition complements J.D. Power’s strengths in vehicle valuation and detailed vehicle specification data and analytics while broadening its footprint into the European and Australian automotive markets. The deal creates strong value for customers of both companies by bringing together Autovista Group’s comprehensive European and Australian market intelligence with J.D. Power’s market-leading predictive analytics and valuation and customer experience datasets. These highly complementary offerings will give original equipment manufacturers (OEMs), dealers, insurers and financing companies a truly global view of critical trends influencing the industry, along with the tools they need to accurately forecast risk, capitalise on burgeoning trends and align sales strategy with real-time market dynamics.

12. Tecala splashes $10M on rapidMation

IT services provider Tecala has scaled up its investment in automation capabilities by acquiring NSW-based consulting outfit rapidMation. As revealed in AFR’s StreetTalk, the deal, worth $10 million, will automatically bolster Tecala’s automation skills. RapidMation was founded in 2018 and specialises in intelligent automation. Last November Tecala bagged $18 million from investment firm Armitage Associates in order to chart a major nationwide expansion.  With the funding, Tecala intends to pursue a series of acquisitions, as well as expand its presence in Brisbane, Adelaide and Perth. As part of the deal, Armitage took a “significant” stake in Tecala, with former NTT Australia and Dimension Data CEO Steve Nola joining its board as its chairman.