Decades-old Australian software vendor Prophecy International expects to transform itself into a $20 million business by buying a Sydney company and building its own partner channel.
The firm has bought local analytics software house eMite, which lists a string of high-profile IT providers as customers. The deal is worth up to $17.8 million, depending on future performance.
Sydney-based eMite was started more than a decade ago by brothers Stuart and Darren Geros, along with Matthew Foster. The company is an Australian Microsoft Gold partner and lists several IT providers as customers, such as HP, CSC, gen-i, and Alphawest (acquired by Optus). Other customers include Allianz, Commonwealth Bank, ANZ, QBE, Toyota Financial Services, and NSW Transport Roads & Traffic Authority.
eMite is used by IT providers to apply analytics techniques in the management of IT systems, bringing together data from different sources. The product is pitched as a way to leverage existing tools like SCOM, Tivoli, HP, EMC, Nagios and BMC.
eMite technology was used in an IT overhaul at the Bank of Queensland’s (BOQ) vendor financing arm, BOQ Finance, several years ago.
As well as being a Microsoft Gold partner, eMite is also a global partner of ServiceNow, VMWare, IBM, CPT Global, and in Australia uses implementation partners NSI Technology and JDS Australia. The company is also on the federal government Data-Centre-as-a-service Multi-Use List, a group of approved data centre suppliers.
Prophecy earnt $7.1 million in revenue in its 2014 financial year, and is expecting revenue to hit $20 million by the end of the 2016 financial year following the purchase, which closed on 1 July.
The eMite acquisition includes an upfront payment of $4 million and 6.3 million Prophecy shares, with the final price potentially reaching $17.8 million depending on performance in the 2016 financial year. The deal will add approximately 20 staff, bringing the total number at Prophecy to around 50.
The Adelaide-based company has sold software since 1980. It primarily operates directly, but is factoring channel partners into future growth plans, said chairman Ed Reynolds.
“Most of what we’ve done is direct but we are working on building up partners. eMite has been mostly direct, but they’re working on building up partners as well,” he said.
In addition to eMite, Prophecy has had some success with an event logging tool called Snare. It also sells software for Births, Deaths and Marriages (BDM) registry offices called Promadis, and a billing and customer information suite for utilities called basis2, developed for the Oracle RDBMS.
Asked if any more acquisitions could be on the cards, Reynolds told CRN: “Our stated aim is to continue to look for more software in this tools area that we can add to our basket. We certainly don’t expect to do anything quickly. We’ll keep an eye on what’s going on out there.”