Advisory and tech services company Atturra (ASX: ATA) is making headway into regional Australia, with its subsidiary Atturra Holdings acquiring Newcastle-based IT company Sabervox via a Share Purchase Agreement (SPA).
As per the SPA, the acquisition will demand an upfront payment of $4 million in cash and $1 million worth of ATA shares. The deal has the potential for an additional earn-out/post-completion consideration of up to $2.5 million in cash, contingent upon Sabervox’s ability to meet performance targets for the 12-month period ending September 30, 2024. The purchase price, incorporating both immediate and deferred components, is based on a multiple of 5.5 times the projected EBITDA.
CEO of Atturra, Stephen Kowal, said, “The acquisition of Sabervox expands Atturra’s managed services capabilities into regional NSW. We see the acquisition of Sabervox as a launchpad for further regional expansion and economies of scale associated with staffing, facilities and infrastructure. Sabervox is recognised as a trusted partner in regional NSW and this acquisition enhances our ambition to be Australia’s leading Advisory and IT solutions provider.”
The completion of this transaction is anticipated around September 29, 2023, subject to the satisfaction of conditions precedent outlined in the SPA. These conditions include obtaining consent for the change of control in relation to material contracts.
Atturra is a technology business, which listed on the ASX in December 2021. It provides a range of advisory, consulting, IT services and solutions with a focus on local government, utilities, education, defence and more. For instance, it helped Victoria University streamline operations and improve user experience. Atturra migrated two decades of historical and current data, business processes and custom apps to a cloud for easy accessibility and navigation.
Now, the Company is aiming to narrow down on regional potential with acquisitions like Sabervox. Sabervox specialises in providing managed IT services and cloud subscriptions to mid-sized customers in regional NSW and beyond.
Managing Director of Sabervox, Dan Wright, said, “When we started this journey 15 years ago, we had a vision to bring quality IT services to businesses in regional areas. Becoming a part of Atturra reinforces what we have set out to do. With access now to Atturra’s extensive suite of services, we are confident of giving all our customers an unrivalled experience. Our commitment to our customers will continue from our office in Newcastle with the same employees – many of whom have been with us from the start.”
In FY23, Atturra recorded a remarkable 41.8% surge in profit, reaching $10.2 million. Additionally, the Company achieved an impressive revenue growth of 33% compared to FY22, totaling $178.3 million. This robust financial performance is a testament to Atturra’s commitment to growth through acquisitions.
While the Sabervox acquisition is a big win, it follows Atturra’s recent investments in the IT sector. In 2023 alone, Atturra acquired specialist Microsoft partner Hammond Street Developments for $6.5 million and IT company The Somerville Group for $15 million.
Kowal concluded, “We look forward to having Dan Wright, Allan Ballantyne, and the team at Sabervox join Atturra, and also to the opportunity to provide exceptional service to their client base with the broad range of solutions Atturra has to offer.”
The acquisition of Sabervox does not only make a case for Atturra’s financials but also underscores the potential of regional Australian markets.
Alinda is a Business Reporter for The Sentiment
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