Strong M&A activity in the IT and Professional Services sectors in Australia May 2022

2. EY adds boutique Axiom to Forensics & Integrity Services practice

In its third deal in just as many months, EY has acquired Axiom Forensics, a boutique disputes resolution and forensic accounting firm. Commenting on the deal, David Larocca, EY’s CEO for Oceania, said, “I am excited to welcome the team from Axiom Forensics to our Assurance practice in Sydney, and in particular to the growing Forensics team.” Founded in 2004, Axiom Forensics offers independent expert forensic accounting, valuation and dispute consulting services, backed by capabilities in technology and data analytics. The firm works for clients across sectors, with a strong focus on legal firms. As part of the deal, nine professionals are joining EY, including Michael Potter and David Mullins – both have been appointed a partner in the Forensics & Integrity Services practice based out of the Sydney office.

3. Spirit Technology gets $21m for fixed wireless towers

ASX-listed broadband play Spirit Technology will sell its wholesale fixed wireless assets to privately-owned Maret Group and use the capital to fund growth in its SMB technology and cyber solutions businesses. Spirit Technology’s shares were in a trading halt while the company finalised its fixed wireless divestment. It is understood Spirit Technology has cut a $21 million deal to sell its predominantly east coast rooftop towers portfolio, including a $15 million upfront payment and another $6 million in earn-outs over the coming two years, subject to revenue hurdles. The deal would see Maret Group’s infrastructure arm take control of the towers, while Spirit would retain the business customer relationships and revenue in return for a wholesale services fee. The two plan to work together to chase new customers, combining Maret’s towers and spectrum with Spirit’s existing customer base and sales staff.

4. Superloop picks up Acurus for $15M

Fibre network operator Superloop is to acquire Melbourne-based technology firm Acurus for a total of $15 million in order to expand its broadband relationships and grow its subscriber base. Acurus provides a range of services, including its white label internet service provider (ISP) platform, Anex, which is described by the firm as ISP-as-a-service, available in the form of a pre-built product or a newly-designed product within a six month time frame. In addition, it also provides services support, managed services, cyber security and threat management, strategy consulting, project deployment, networks and network aggregation, application development and platforms, clouds and hosted services and maintenance, monitoring and support. Its ISP services have been previously used to power internet offerings provided by Energy Australia and Officeworks. Additionally, it also has worked with Bakers Delight, Zen Energy, Roy Morgan and Hume Bank on other projects in the past. If successful, the deal will see Acurus acquired for $12 million in cash and $3 million in Superloop shares, includes its managed services provider (MSP) business and is expected to be completed by July 2022.

5. The Access Group acquires Reckon Accountants Group for $100M

UK-headquartered business software provider The Access Group has expanded its accounting software portfolio through a $100 million deal to acquire Reckon’s Accountants Group. According to Access Asia Pacific president Kerry Agiasotis, the deal is set to bolster the business software provider’s stance in the accounting space following last year’s purchase of HandiSoft as part of its acquisition of Sage Group’s Australia and Asia businesses. The deal is expected to close within the next three months and does not include the Sydney-based accounting software provider’s Business and Legal Practice Management Groups, with the latter set to be a major focus for Reckon post-acquisition.

6. Atturra acquires Perth OpenText partner Hayes for $8.5 million

Atturra has acquired OpenText partner and information management consultancy Hayes Information Systems and Communications for $8.5 million to bolster its enterprise content management (ECM) services. Based in Perth, Hayes offers ECM application support as well as digital transformation services and technical and functional support. Under the terms of the deal, Atturra will purchase Hayes for an upfront consideration of $8.5 million, with the acquisition expected to close on or around 1 June. Also up for grabs is an earn out/post-completion consideration of up to $7.89 million in cash from now until financial year 2023-24, based on audited earnings before interest and tax targets and key employee retention goals. As a result of the deal, the NSW-based business formerly known as FTS Group is set to expand into Western Australia.

7. BlueRock adds Melbourne-based legal boutique to law division

Melbourne-based professional services firm BlueRock has acquired the majority of Marsh & Maher Richmond & Bennison, in a deal that adds 22 staff to its legal division. Since its inception in 2008, BlueRock has grown into a full-service professional services firm to small and mid-sized businesses and entrepreneurs in Melbourne and the wider Victoria region. The firm’s services include accounting, legal, business advisory, private wealth, digital, insurance, and taxation. Marsh & Maher commenced business in 2008. Having grown into a circa 20-strong business, in 2017 the legal boutique merged with counterpart Richmond & Bennison to double the size of its team. As part of the deal with BlueRock, the Insurance and Family Law practices of Marsh & Maher Richmond & Bennison have decided to remain outside of the transaction, meaning that just over half of the team is crossing to BlueRock where they will become part of BlueRock Law.

8. Fiftyfive5 acquires The Leading Edge and The Digital Edge

Research consultancy Fiftyfive5 has acquired Sydney-based research and data consultancies The Leading Edge and The Digital Edge from marketing & communications group Enero. As part of the deal, reportedly worth $1.35 million in cash, 75 staff will cross to Fiftyfive5, which sees its headcount jump to around 270 across its four offices in Sydney, Melbourne, Auckland and Singapore. Founded more than 30 years ago, The Leading Edge specialises in insight, innovation, shopper marketing and brand management services to brands and retailers. The Digital Edge, which was established in 1999, is an online market research fieldwork agency, delivering data for researchers and PR agencies. The two agencies have been part of Enero since 2004. In a statement announcing the sale, Enero said that the divestment is part of its strategy to refine its portfolio of global brands, which includes BMF, Orchard, Hotwire, CPR and OBMedia.

9. Sydney’s Software Combined acquires four software businesses

Sydney-headquartered Software Combined has acquired software providers Streamtime, Scope Systems, Energy Inspection and MacroView. All four are the first acquisitions in the software aggregator’s portfolio, and are collectively expected to generate some $11 million in EBITDA. Software Combined’s business model centres around acquiring Australian and New Zealand-based niche and B2B industry-specific software companies, examining around 150 a year. Streamtime provides business intelligence and resource and project management software for the creative industry. Scope Systems specialises in enterprise resource planning and business intelligence for the mining sector, Energy Inspection provides BERSPro energy modelling software, and MacroView provides software for managing and generating documents and emails in the Microsoft 365 environment.

10. Orro runs with RIOT Solutions acquisition for cyber security push

Orro Group has acquired Brisbane-based IT services provider RIOT Solutions to further develop its cyber security and digital network capabilities. Founded in 2015, RIOT offers a range of managed services, including managed security services, threat detection and response, asset viability and design solutions, as well as its ValidPro product, an estimating and quotation service. Orro claims RIOT has worked with close to 100 customers, including the Queensland government in 2019, when it provided managed services under a multimillion-dollar contract, and hospitality provider ALH Group in 2018, which saw it design and supply product.