Data#3 pays $6m for Business Aspect

Summary:Data#3 is expanding its consulting capabilities to help customers make the transition into the hybrid IT environment.

Data#3 has announced the acquisition of business and technology consulting firm, Business Aspect Group and its subsidiary companies.

Data#3 will pay AU$6 million in cash on completion of the transaction. In addition, subject to achieving EBTDA hurdles, Data#3 will pay Business Aspect AU$1.6 million in FY15 and AU$1.9 million in FY16, as well as issue AU$2 million in shares at the end of FY16. However, if there are any shortfalls to the results against these EBTDA hurdles, Data#3 will reduce the number of shares it will issue to Business Aspect.

As part of the acquisition, Data#3 said Business Aspect will operate as an autonomous business and will retain the ability to deliver independent and objective advice. But as part of Data#3, it will be able to deliver end-to-end outcomes from strategy to technology implementation and management where it makes sense for its clients

Business Aspect will also be relocating its Queensland operation into a dedicated area of Data#3's head office, and its personnel outside Queensland will work from Data#3's interstate offices.

Data#3 managing director John Grant told ZDNet that the acquisition is part of the company's strategy to expand its services capabilities, as well as to enhance Data#3's ability to service its customers from strategy through to implementation.

"About three years ago, it was clear to us our customers needed our help at the time to make their way to the hybrid IT app-centric environment, and that we needed to play a part in that. We were already delivering all of the infrastructure and the apps for that environment and we needed to make the connection from their decision making process through to the implementation process," he said.

"We had started our own little consulting service, but through the pressure of financial performance over the last three years, we haven't been able to expand that business as fast as we would've liked. What Business Aspect does is offer consulting capabilities at scale with 70 people and AU$14 million in revenue."

Formed in 2005, Business Aspect generated AU$1.3 million in EBTDA in FY14. It provides consulting services to a range of public and commerical sectors including banking and financial services, educating and training, energy, mining, government, and information technology.

Earlier this year, Data#3 bought a AU$2.5 million stake in Wi-Fi analytics company Discovery Technology.

Data#3 reported last month that continued product commoditisation, lower margins due to competitive pressure, and longer decision cycles, combined with smaller transactions, impacted the company's full-year results for the 2014 financial year. It reported a 38 percent drop in net profit after tax to AU$7.5 million, but saw revenue increase 8.1 percent, to AU$833.6 million.

Topics: Cloud, Australia, Enterprise Software

About

Since completing a degree in journalism, Aimee has had her fair share of covering various topics, including business, retail, manufacturing, and travel. She continues to expand her repertoire as a tech journalist with ZDNet.

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