In a bid to expand its ServiceNow Cloud capabilities, Australian business solutions company, UXC Limited, will purchase local reseller, Keystone Management Solutions, with consideration between $24 million and $28 million, dependant on performance and earnings targets through the end of the 2015 financial year.
Payment will be a mixture of cash and shares. UXC says the acquisition multiple is in line with prior deals and transaction is expected to be immediately earnings accretive. It claims the earnings profile and growth expectations of the business will make a positive contribution to earnings the second half of the 2014 financial year.
Moving forward, the business will be branded UXC Keystone, and will become the core component of the UXC Cloud strategy with the applications division. Keystone chief executive officer (CEO), Dion Williams, will report to UXC managing director, Chris Nicolli, and will work with fellow directors, Paul Heath and Neil McKinnon to build on the growth and customer support achieved to date.
In a statement, UXC said it will benefit from relationships with more than 120 ServiceNow enterprise, government and education sector customers, including the Queensland Government, RACV, Uniting Care Queensland, the University of Western Sydney, and others.
According to Nicolli, the acquisition -- as well as UXC's partnership with ServiceNow, which was signed in August -- is part of the company's strategic direction to create stronger customer engagement and "put UXC at the forefront of delivering value beyond IT."
"At UXC we are seeking to find new growth opportunities while continuing to build deep capabilities and deliver outstanding customer centric solutions that can drive earnings growth," Nicolli said. "We see the high growth Cloud-based IT service automation market, coupled with our strong ITSM experience in Australia and South-east Asia, as ideal platforms to combine with Keystone."
"The expansion is also a compelling opportunity for a strong return on our investment and furthering our strategy of building our Cloud services leadership."
The Keystone business model provides a recurring annuity base of business that is supportive of key clients and the UXC strategy of increasing annuity over the next three years to more than 30 per cent of revenue.
ServiceNow Asia-Pacific and Japan (APJ) vice-president, Jimmy Fitzgerald, said, "As more and more enterprise customers choose ServiceNow to transform IT by automating and managing IT service relationships across the enterprise, we are looking for partners that offer capabilities in support of such transformational programs, ensuring that customers can realise their intended benefits."
"The combined capabilities and UXC's experience in ITSM solutions, IT strategy, consulting, and managed services together with the strength and experience of Keystone places it in a unique market to lead such transformations."