Cirrus makes Melbourne acquisition

27/03/2017 - 10:51

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IT company Cirrus Networks has entered into an agreement to acquire Melbourne-based NGage Technology Group in a cash-and-scrip deal worth $2.5 million.

Cirrus managing director Matt Sullivan.

IT company Cirrus Networks has entered into an agreement to acquire Melbourne-based NGage Technology Group in a cash-and-scrip deal worth $2.5 million.

Cirrus, based in Perth, said it would pay $1.5 million in cash and $1 million in shares to acquire NGage, an end-to-end IT solution provider focused on various sectors including hardware, software, managed services and professional services.

The deal also includes scope for a further $1 million payment in performance shares, subject to the achievement of certain milestones.

In a statement, Cirrus said it would fund the cash component of the acquisition by raising capital, with the details yet to be disclosed.

NGage co-founder Jarrod Bloomfield will join Cirrus’s executive team as part of the takeover, and will continue to run the Melbourne business.

Cirrus managing director Matt Sullivan said the acquisition targeted a number of strategic focus areas for the company, including geographical expansion, market share growth and annuity growth.

“NGage has a brand, culture and blue chip client base complementary to our own and we are excited at the opportunities this presents for clients,” Mr Sullivan said.

“After the very successful purchase and transition of L7 into Cirrus just over 12 months ago, this is the next strategic step to become a nationally recognised market leader in enterprise based product, integration and managed services.

"Having secured the Ngage relationship, the acquisition reinforces the success and value of executive director and Cirrus founder Frank Richmond is having in focusing on our strategic acquisition goal.”

Cirrus shares have been locked at 2.4 cents each since the company entered a trading halt on Friday.

It expects its shares to recommence once the proposed capital raising is completed.

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