Perth IT firm Birchman Asia Pacific is set to be acquired by listed Melbourne-based company SMS Management & Technology for $25 million.
Perth IT firm Birchman Asia Pacific is set to be acquired by listed Melbourne-based company SMS Management & Technology for $25 million.
SMS announced today that it would acquire 100 per cent of Birchman Asia Pacific’s shares in exchange for $25 million, consisting a $12.5 million cash payment followed by two payments conditional on profit performance over a two-year period.
Further payments of up to $5 million may be made if profit exceeds targets over the two-year earn-out period.
Birchman Asia Pacific currently employs around 200 staff in Western Australia, providing IT solutions, business consulting, integration and managed services, and has annualised revenue of $32 million.
It is the ninth biggest IT firm in WA, based on the number of IT and technical professional staff it employs in the state, according to Business News BNIQ data.
Birchman was jointly established eight years ago, in October 2005, by Frank Early, ex-DMR Consulting, and Phil Thistlethwaite, ex-KPMG.
Mr Early, who has been chairman of the business, said Birchman had been pursuing its own interstate expansion when it was approached by SMS.
"The acquisition accelerates our own strategic expansion plans," he said.
Mr Early said the Birchman brand would be retained for a period of time.
SMS chief executive Tom Stianos said the acquisition accelerated the company’s strategy to expand the existing business in Western Australia and provided the operating scale to position itself as a leading IT solutions provider in that market.
“Birchman Asia Pacific’s business is a clear stand out in WA,” Mr Stianos said in a statement.
“They have a talented management team operating with mature processes, development methodologies and a great customer service culture. We are confdent their business will now grow strongly within SMS and their customers will benefit from the extended Asia Pacific reach that SMS now offers them.”
Birchman Asia Pacific is an independent alliance partner of the Birchman Group in Europe, which is not part of this acquisition.
The transaction is subject to the satisfaction of conditions and is expected to complete next month.
