IT services provider PS&C has sold its Canberra-based subsidiary North BDT to Melbourne security service provider Tesserent.
PS&C only acquired North in May 2018 - the sale reflects its change in strategy after recording substantial losses.
PS&C's ASX announcement (pdf) reveals it will receive $5.3 million in cash and shares to acquire North, some of which will go to North's founders.
North specialises in strategy and governance, cyber security, technology and project services, service integration and management for federal government clients.
PS&C acquired North in May 2018 when it was called NTH Consulting, in a bid to expand further into federal government.
“North is a logical acquisition for Tesserent as it will allow us to expand our reach within Australia into the ACT, and enable us to provide our cybersecurity offerings to North’s excellent portfolio of public and private sector customers,” Tesserent managing director Julian Challingsworth said in the company’s own ASX announcement (pdf).
“The team at North will also bring their extensive knowledge in working with Australian government clients and a strong background in scaling up growth businesses.”
Tesserent anticipates that North will deliver FY20 normalised EBITDA of $1.2 million on the back of its strong portfolio of government clients. The company also adds cross-sell opportunities for SOC and Splunk services with Tesserent.
Tesserent will also combine North with recent acquisition Rivium into one Canberra office.
In the same announcement,PS&C also revealed that its earlier deal with Tesserent has been completed, offloading its security segment for $14 million.
The amount is lower than the previously reported $16 million price tag when it was first announced in early October 2019, after both agreed to remove the $2 million earn-out agreement.