Brisbane-based managed services provider Integrated Solutions Group Queensland has been acquired by ASX-listed SKS Technologies for $5 million.
The deal expands the audio-visual technology specialist to expand into Queensland and also reaches a wider customer base.
Integrated Solutions specialises in IT project management, consultancy and ongoing support
services, including cybersecurity, data hosting and procurement. SKS said the two companies have a similar and complementary client base.
As part of the deal, some 32 Integrated Solutions staff will join SKS and will continue working at the Brisbane office.
“This acquisition fits into the third cornerstone of our strategy, Technology Expansion, which aims to drive higher margins with a recurring revenue model by leveraging the convergence of IT and audio-visual networks,” SKS chief executive Matthew Jinks said.
“Much of our traditional work on projects in the AV space requires close collaboration with IT providers to ensure an end result that is seamlessly high-functioning. Having worked with Integrated Solutions on a number of successfully delivered projects, the concept of bringing those skills and expertise in-house is a logical and compelling extension of what we already offer our customers.”
The $5 million price tag comprises $1.8 million in cash and $1.2 million in SKS shares due upon completion at the end of September, plus an additional $2 million under an earn out arrangement spread out over three years.
SKS said it was aware that audio-visual will amalgamate with IT services and that has since been accelerated by the COVID-19 pandemic.
“We employ a very disciplined approach to our acquisitive growth, with a specific set of criteria used to assess potential targets, including specifically no or low debt, no inventory, additional working capital, high margins, a recurring revenue model and excellent growth prospects,” Jinks said.
“Integrated Solutions ticks all of these boxes, including deriving approximately 61 percent of its revenue from recurring income structured under one to two year agreements.”