Australian IT solutions integrator Cirrus Networks has acquired managed services provider NGage Technology Group for $2.5 million.
The price comprises $1.5 million in cash and $1 million in Cirrus shares to be issued on completion and escrowed for two years. The sellers also have the opportunity to earn an additional $1 million in Cirrus shares, or part thereof, for achieving certain FY17 earnings targets.
Melbourne-based NGage is a reseller and managed service provider that has grown quickly off the back of its partnerships, including early wins with flash vendor Pure Storage. Other key vendors partners include Dell EMC, VMware, and Veeam.
NGage has grown its revenue tenfold in the last four years to $27.7 million in FY2016.
The company was founded in 2011 by Jarrod Bloomfield and Brent Valle, who brought their respective experiences at Southern Cross Computer Systems and Lenovo to create the award-winning company. Bloomfield will join the executive team at Cirrus, and continue to grow the Melbourne business.
"This is an exciting development in the short successful history of NGage," Bloomfield said.
"Being part of the Cirrus group will accelerate our growth to the IT solutions and managed service sector, where we are a provider of choice in the market through innovation, customer focus and technical excellence.”
The deal marks another acquisition for Cirrus Networks, the publicly listed system integrator founded by executive director Frank Richmond and led by managing director Matt Sullivan.
Richmond told CRN back in 2014 that his company – then still private before its reverse listing via mining shell Liberty Resources – was looking for acquisitions on the east coast.
"I have been talking to Jarrod for nearly a year on and off," Richmond told CRN this morning as the acquisition was announced.
"We both sell similar technology but there are also a number of areas they don't do. They don't do much in the networking space, they don't do much in security. Their managed service offering has only just started. Together we will be a much stronger force."
The acquisition of NGage is Cirrus' biggest deal since it went public, though not its first.
Cirrus made one of the deals of the year in 2015 when it paid just $500,000 to snap up what was left of L7 Solutions, the company acquired by Amcom for $15 million in 2011.
Late last year, Cirrus acquired the remains of Canberra-based reseller Dataflex from VTS IT for $100,000.