Publicly-listed MOQ has entered into an agreement to acquire fellow Microsoft partner Wardy IT Solutions in a $7.5 million deal.
The deal will be paid both in cash ($2.5 million) and MOQ shares ($5 million) but could come to a total price of $13.5 million. This is due to a possible earn-out payable by October 2020 subject to Wardy IT achieving "certain performance criteria". The earn-out value could reach up to $6 million, MOQ said.
Wardy IT founder and managing director Peter Ward will remain with the business as well as key management team. HE will also become a significant shareholder in MOQ.
“Wardy IT has actively partnered with the MOQ team on a number of projects over the last five years and we are all excited by the opportunity to become part of the MOQ business," Ward said.
"We anticipate being able to significantly strengthen our cloud practice and grow the combined data platform and data analytics segment, while continuing to deliver the high quality of service to which our clients are accustomed," he added.
Wardy IT was established in 2004 and is a Microsoft specialist that offers data platforms consultants, trainers and data analytics specialists. The company has offices in Adelaide, Brisbane, Canberra, Melbourne and Sydney in Australia and Auckland and Wellington in New Zealand. The company has unaudited revenue for the 2019 financial year of $14.2 million.
In February, Wardy IT was offering 50 free Microsoft Azure migrations as Microsoft support and security updates for SQL Server 2008/R2 on-premises comes to an end in early July 2019.
MOQ expects the acquisition to be completed by September which will be followed with the roll out of strategic and communication models across all stakeholder groups to ensure consistent service and engagement.
In December MOQ will have provided and assessed a business process, system integration plan and service delivery model standardisation. By March 2020 client contract conversion will be put in place resulting in one integrated business by the first quarter of 2021.
"We look forward to extending our relationship with MOQ through the acquisition of Wardy IT. We have had a long and mutually beneficial partnership with Wardy IT – they have three Gold level partnerships in data platforms, data analytics and cloud platforms and an exceptional reputation," Microsoft Australia managing director Steven Worrall said.
"The combined expertise of the two companies will be of great value to small and medium sized businesses that rely on Microsoft solutions to run their operations efficiently and effectively."
MOQ will leverage Wardy IT's blend of professional services and "and high-value" recurring services to provide sustainable growth to MOQ.
"The acquisition of Wardy IT is an excellent strategic fit for MOQ and aligns with our vision to develop, build and acquire cloud-centric complementary technology businesses," MOQ CEO Joe D’Addio said.
"We are pleased to welcome the Wardy IT team and their market-leading expertise in data architecture, data optimisation and data management capabilities on the Microsoft platform. These capabilities are a real point of difference for MOQ and, as a result, our customers should benefit from our strengthened resources in an area that is central to their digital transformation efforts.