Empired acquires OBS for $15m

23/09/2013 - 11:59

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Information technology group Empired has agreed to acquire Melbourne-based IT consulting service provider OBS for $15 million and has also announced a major contract with an unnamed resources company.

Empired acquires OBS for $15m
Empired managing director Russell Baskerville

Information technology group Empired has agreed to acquire Melbourne-based IT consulting service provider OBS for $15 million and has also announced a major contract with an unnamed resources company. 

The OBS purchase will be made through a one-off cash payment funded through a combination of equity and debt.

Empired raised $15.5 million by way of a two-tranche placement, managed by Euroz Securities, of 25 million ordinary shares at a price of 62 cents per share.

OBS employs 148 staff at offices across the country and is expected to generate $32 million in revenue this financial year.

Empired managing director Russell Baskerville said the acquistion would allow the company to expand its presence nationally.

“This transaction firmly cements Empired as a major provider of Microsoft application services with a genuine national presence across Australia,” Mr Baskerville said.

“The transaction provides Empired a step change in operational scale and a material uplift in all key financial metrics.”

Empired last month paid its first dividend to investors following a solid lift in net profit and revenue.  

The acquisition is expected to be completed by the end of the month subject to the satisfaction of a small number of conditions. 

OBS is currently a part of the software developer Nintex Group, which was taken over by US private equity firms TA Associates and Updata Partners for $US222 million earlier this year.

Law firm Allens advised Nintex Group on the transaction with Empired.

Seperately, Empired announced that it had been awarded a three-year contract for the design, development and implementation of core operational mining systems within an unnamed major resources company, with a projected value of work of up to $50 million.

Mr Baskerville said the contract would ramp up immediately, subject to ongoing approvals, providing a strong growth platform for FY14.

Empired shares were up by more than 12 per cent at 79  cents on the ASX at 12:00PM WST.

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