Rhipe, formerly known as Newlease, announced at its AGM that it is acquiring nSynergy, a Microsoft Cloud based services provider for $25.35 million.
nSynergy is a Microsoft-centric Cloud business focusing on Office365 implementations. It has offices in Melbourne, Sydney, Shanghai, New York and London, and has 40 staff. It provides consulting and solutions services both locally and globally.
All existing nSynergy staff will be joining Rhipe, with no staff cuts. Rhipe CEO, Dominic O'Hanlon told ARN it will become the new Cloud Solutions Division of Rhipe, with a rebranding to follow at a later date.
He says the acquisition allows the company to provide a complete package of Cloud solutions, including licensing, service, 24/7 support, IP, marketing and lead generation. He boasts growth rates of between 40 and 45 per cent 'over the past few years', and that the acquisition will be a fundamental change to how the company operates, internally and externally.
"It basically means we're supplying anything the Cloud channel needs that they can't supply themselves," he said.
"This acquisition will provide the service provider community with non-competitive services and support capabilities. It will enable our partners to have greater access to sell and support products without needing to continue adding to their own team of skilled people. For those who already have the resource capability, our team will provide an additional bench of staff that may be available during times of peak load," he said.
The nSynergy $25.35 million buy price also includes an $8 million contingent earn out over 24 months.
He told ARN the deal had been in the works since the Microsoft Annual Partner Conference held on September 2, and that the response from shareholders and key stakeholders at the AGM today saw 'unilateral applause'.
The company had initially looked to capital raise around $20 million, which was oversubscribed due to huge demand - no specific figures were supplied. But O'Hanlon says the acquisition pays for itself immediately.
Rhipe also announced that it has acquired a 12.5 per cent stake in nSynergy's sister company, LiveTiles, for $2.5 million. Livetiles provides a unified global Cloud interface for Sharepoint, Azure and Windows 8.
It boasts 3.7 million users, and aims to reach ten million by year end. It has offices in Melbourne, Sydney, New York and Shanghai.
nSynergy COO and co-founder, Peter Nguyen-Brown, believes the acquisition is a good one culturally.
"I am excited to have found such a fantastic company for nSynergy to join. rhipe is made up of a great group of liked minded people and there is a fantastic cultural fit between the two organisations. We have a unique joint strategy mapped out and I can't wait to start working together as one business."
The company recently announced its name change at ARN's Roundtable 'Cloud Evolution and the ongoing journey', and the company's name officially changes from Newlease to Rhipe effective Monday, after a resolution was passed at today's AGM.
At the trading halt, it was listed at $1.09 on the ASX. It was trading at 0.60c in May.