June M&A blog: Strong M&A activity to conclude the FY

June M&A blog: Strong M&A activity to conclude the Financial Year

1.??????Humanforce acquires intelliHR

Two Australian human resources technology providers have joined forces as Humanforce buys IntelliHR in a deal worth $77 million.?The deal marks Sydney-based Humanforce’s third acquisition since receiving funding in May 2022 from private equity firm Accel-KKR, which include Ento and Wagestream Australia. Specialising in workforce management, Humanforce claimed the fellow software-as-a-service provider intelliHR will “unlock new and exciting opportunities for its customers”.?Founded in 2013 and based in Brisbane, intelliHR provides a people platform that uses analytics and a single system of record (Core HR).??intelliHR is designed to help businesses make intelligent people decisions through real-time, proactive and data-rich insights about their employees.?Humanforce said it is now focused on mid-market and enterprise businesses in core industries of care, sports, leisure, hospitality and retail among others.

2.??????Wesfarmers’ API acquires telehealth giant InstantScripts

In a major move that will help scale its health division, Wesfarmers (ASX: WES) has agreed to purchase Melbourne-based telehealth service InstantScripts in a $135 million deal via its subsidiary Australian Pharmaceutical Industries (API), the owner of pharmacy chain Priceline. InstantScripts, founded in 2018 by former merchant banker Dr Asher Freilich and web developer Maxim Shklyar, provides virtual medical consultations and prescriptions to patients, as well as other medical consultation and pathology services.?Over the last year, the telehealth service has completed more than 1 million Australian patient interactions. The acquisition comes three weeks after Wesfarmers’ API?lobbed a $169 million bid to acquire SILK Laser Australia (ASX: SLA), which has since been?thwarted by a superior proposal from Hong-Based EC Healthcare. Freilich said the proposed transaction reflected the growing recognition of the important role that digital health services play in Australia’s complex health system.

3.??????Thales to acquire Tesserent for $176M

Thales Australia is poised to acquire all of Tesserent’s shares in a deal worth A$176 million. Announced on the Australian Securities Exchange (ASX), Tesserent said the two companies have entered into a binding scheme implementation deed for 100 per cent of Tesserent’s shares at A$0.13 per share. With 1,354,182,116 shares on issue, according to Tesserent’s listing on the ASX, this places the equity of the cyber security provider at $176 million as of publishing, which is to be funded by Thales’ own cash reserves. Post-acquisition, Tesserent will retain its brand, but its visual identity will include “Cyber Solutions by Thales”, with the multinational defence industry contractor growing its footprint across Australia and New Zealand in the process. Kurt Hansen, Tesserent CEO, said to?ARN?that the business entity will remain "fully intact", with approximately 50 people coming from Thales Australia's cyber security business coming over to Tesserent.

4.??????Endava purchases 660-strong Australian tech company DEK

Technology services company Endava has added a next chapter to its rapid buy-and-build entry into the Australian market with the acquisition of DEK Technologies. Headquartered in Melbourne, with additional offices in Ho Chi Minh (Vietnam) and Stockholm (Sweden), DEK Technologies?is a firm that develops software and hardware solutions across a range of applications, including embedded systems, real-time solutions, telecoms and data communications. The company is particularly active in the telecoms space, with Telstra its flagship client in Australia. The deal adds 660 staff to Endava’s headcount, and comes hot on the heels of the local purchases of?Lexicon in October 2022?and?Mudbath in May 2023.

5.??????Deloitte acquires workforce management consultancy Enforce

Established locally in 2018, the Australian arm of Ceridian workforce management and payroll cloud technology partner Enforce Consulting has been acquired by Deloitte. Professional services giant?Deloitte?has picked up the Australian branch of Enforce Consulting, which on entering the market became the first local partner of human resources software provider Ceridian. Enforce’s Asia Pacific Ceridian Dayforce practice director Gordon Turnbull will join Deloitte Consulting as a principal later this month, alongside a dozen Enforce professionals. Established in San Francisco in 2016 by one-time Andersen Consulting duo Tim Dilley and Michael McKay, Enforce expanded to Australia two years later via the launch of an office in Sydney, extending its existing Ceridian partnership and implementation and management expertise downunder. Meanwhile, Ceridian, which acquired Dayforce in 2012, announced its own partnership collaboration with Deloitte toward the end of last year.

6.??????DGA Group joins TSA Management

TSA operates across the UK, Australia and New Zealand (ANZ), and South-East Asia. TSA is backed by Quadrant Private Equity. DGA Group was founded in 1993 and has over 60 employees working out of their offices in the UK, Singapore, and Australia. They serve clients in the property and infrastructure industries including employers, tier 1 contractors and major supply chain organisations. Introducing a larger Contract and Dispute Resolution service to our existing clients, across existing geographies, further advances TSA’s international growth aspiration. The DGA Group deal follows TSA’s acquisition of UK Project Management and Quantity Surveying business Henry Riley on 1 May 2023. TSA’s strategic organic and acquired growth has increased revenue by 400 per cent in 5 years.

7.??????IT consultancy Seisma buys Microsoft specialist Data Addiction

Sydney-based?data?and AI?specialist?Data?Addiction?has been picked up by?ITservices and consulting firm?Seisma, continuing a run of acquisitions since?its purchase by Liverpool Partners. Growing?IT?services and consulting firm?Seisma?Group has acquired Sydney-based?Microsoft?specialist?Data?Addiction, adding to?its end-to-end capabilities. The purchase marks?Seisma’s fourth in the Australian and New Zealand market since?itwas bought by Liverpool Partners in 2020, and follows the latter’s recent acquisition of automation and artificial intelligence?consultancy?Simplyai. Established in Sydney in 2018 by a team of former leaders at Empired (which was?later acquired by Capgemini?for $233 million),?Data?Addiction?is a?Microsoft?gold partner for?data?analytics, platform and cloud, serving clients on?Microsoft?Data?& AI and Dynamics 365 solutions together with Azure migrations and managed services – offerings which?Seisma?intends to integrate with?its existing suite.

8.??????Accenture Acquires Bourne Digital, Expanding SAP Digital Design Capabilities in Australia

Accenture (NYSE: ACN) has acquired Bourne Digital, an Australian digital design agency focused on the SAP??ecosystem. Terms of the transaction were not disclosed. With a specialization in the SAP??Business Technology Platform, Bourne Digital creates experience driven applications, streamlining workflows and introducing automation. It will enhance Accenture’s SAP offerings in the market, particularly in the fast-moving consumer goods, financial services, resources, health and travel industries. Founded in 2015, Bourne Digital is headquartered in Melbourne, Australia and has offices in Sydney and Brisbane. As a specialist SAP??Business Technology Platform partner, Bourne Digital builds design-led digital products and experiences for enterprise customers, including custom portal and web solutions, and mobile applications. Bourne Digital helps clients deliver their technology strategy with an approach that couples design and architecture thinking. Its 66 employees will join the?Accenture SAP Business Group?in Australia, bolstering its ability to deliver a user-led approach to design, architecture and delivery and drive process excellence using SAP cloud technologies.

9.??????PwC to sell 1,750-strong government business for $1 to Allegro

Professional services firm PwC has agreed to sell off its embattled Australian government business – for the symbolic fee of just $1 in a bid to restore faith in the firm’s brand. In a statement released on Sunday, PwC said that it has entered into an exclusive agreement with private equity firm Allegro Funds. Both PwC and Allegro Funds are aiming to agree on a binding agreement within a month. If the deal (code-named ‘Bell’) closes, it would see PwC divest around 20% of its business, representing an annual fee income of A$600 million (of its A$3 billion total). “We have taken this step because it is the right thing to do for our public sector clients and to protect the jobs of the circa 1,750 talented people in our government business,” said PwC Australia Chair Justin Carroll.

10.??Canadian billionaire lobs massive bid for ASX-listed software group

Constellation Software, a Toronto-listed technology group chaired by Canadian billionaire venture capitalist Mark Leonard, has lobbed a $NZ147 million ($134.5 million) takeover bid for ASX-listed EROAD after securing a near 18 per cent stake in the transport fleet management group. Shares in EROAD, which is based in New Zealand, soared more than 60 per cent on Thursday to close up 42￠ at $1.13. The takeover offer was made by Constellation’s subsidiary Volaris, which says it has a “buy-and-perpetual-hold acquisition philosophy”, having snapped up hundreds of software companies since it was founded. EROAD is a transportation and logistics industry tech business. Its software is used to manage vehicle fleets, support regulatory compliance, improve driver safety and reduce the cost of operating a fleet of vehicles. Since May 30, Volaris has built up an almost 18 per cent stake in the company for $NZ23.7 million. If the offer is successful, Volaris has agreed to pay those earlier sellers any difference with the final sales price.

11.??Rennie bolsters ESG practice with addition of Conversio

Rennie has closed its first deal since its inception two years ago, following the addition of Brisbane-based Conversio to its team. Launched mid-2021 with the ambition to become one of Australia’s leading consultancy firms providing net zero and sustainability services, Rennie has grown organically to a 30+ team operating from offices in Brisbane, Perth, and Melbourne. Rennie managing director Simone Rennie said that the firm’s inaugural deal is a “key plank” of its 2023 and 2024 strategy, as the firm eyes to expand its service offerings beyond energy and infrastructure to meet booming demand for net zero related services in the wake of Australia’s accelerating decarbonisation agenda. The addition of Conversio sees Rennie add specialist expertise in greenhouse gas emissions and disclosure. Established in 2017 by Alexander Stathakis, Conversio has built a track record in helping clients with advice and technical direction on GHG measurement, reporting, and verification. The firm also supports clients with strategies for carbon offset/inset, science-based target setting, and the delivery of emission reduction initiatives. Conversio will become part of Rennie’s ESG practice (one of the firm’s 5 lines of business), with Stathakis becoming an associate director and a member of the senior leadership team.

12.??ADT buyout creates Australia’s biggest home security group

An ASX minnow is turning itself into Australia’s No.1 player in home and business security monitoring with the $45 million acquisition of ADT Security in Australia and New Zealand. Intelligent Monitoring Group will more than triple in size through the purchase, which adds 340 staff and $95 million in revenue, at a time when households and businesses are stepping up 24-hour monitoring ahead of a?tougher economic climate and possible recession. IMG managing director Dennison Hambling said ADT was a strong global brand and the acquisition would create a business with greater economies of scale. ADT is one of the biggest home and business security monitoring services around the globe. Mr Dennison said the penetration rate of 24-hour home security monitoring services in Australia, at just under 5 per cent, was still very low. On a pro-forma basis, the combined businesses are earmarked to generate annual revenue of $134 million and earnings before interest and tax of $24.8 million in 2022-23, rising to $31 million in 2023-24. The shares closed on Monday at 12￠. The company is acquiring ADT Security from Tyco Australia Group. Completion of the deal is expected by August 1.

Buying or selling a consultancy? [email protected]