Tesserent has purchased Sydney-based cloud services company iQ3 for $17.2 million in cash and shares.
The Melbourne-based MSSP will pay $8.6 million in cash and the remainder in shares. Tesserent said the cash component of the purchase was fully funded by existing cash reserves. It is comprised of an initial $4.3 million in cash and four deferred payments of 1.07 million over twelve months.
The newly acquired provider has offices in Brisbane, Melbourne and Singapore in addition to its Sydney headquarters. The company offers solutions for private, public and hybrid cloud in addition to managed services and cyber security.
Tesserent said the acquisition would complement it’s push into cyber security as the company worked to develop a holistic cyber security package.
“The addition of secure cloud services to our solution portfolio is a strategic piece to our Cyber 360 offering that takes us one step closer to executing our strategic go-to-market vision,” Tesserent chairman Geoff Lord said in a statement to shareholders.
Most attractive to Tesserent was iQ3’s government business which included 25 NSW Government departments.
The company had an FY20 turnover in excess of $25 million and $3 million in EBITDA according to Tesserent. More than 70 percent of iQ3’s revenue was said to come from “multiple recurring multi-year annuity-based contracts”.
“Joining Tesserent is a natural strategic evolution for iQ3,” the company's MD Craig Humphries said. “The delivery of cloud services is becoming more and more security-centric and now we have the ability to significantly grow the business.”