Australia: 5 Companies Form National Managed Services Provider

I’ve been promising this story for a few weeks. Here it is, at long last: An Australia managed services provider is acquiring four peer MSPs to form a national managed services provider. One of the MSPs involved in the deal — Tim Brewer from Accord — sat down for a FastChat video interview to explain the deal. Here’s the discussion plus some quick details about the five companies involved.

First, the quick details: Under the proposed agreement, ASX-listed telecommunications integrator, Hostech (ASX: HTC), will buy Anittel, Accord Technologies, Axxis Technology and Aspirence. According to Australia Reseller News:

• Hostech will pay $6.9 million in cash, along with $6.75m in shares. It will also take on $3.4m in convertible note debt.
• According to an ASX statement, Anittel, Axxis, Accord and Aspirence will generate $60 million in combined top-line revenue.
• The roll-up involves 270 staff in 15 locations.

Now, my interview with Brewer, who offers additional details about the roll-up strategy:

The discussion covers:

• 0:00: Introduction
• 0:15: Tim Brewer’s role at Accord Technologies
• 0:42: The roll-up strategy: About the five Australia MSPs forming a national MSP
• 1:45: The bigger strategy: The convergence of IT, voice and SMBs
• 2:40: How will the combined companies be branded?
• 3:05: Can the five-company combination really work?
• 3:55: Synergies at the strategy and cultural level
• 4:15: Getting more information
• 4:46: Conclusion

Another Name to Know

I trade email regularly with Brewer, and have offers timely insights into the Australia managed services market. Frequent MSPmentor readers may also recognize another company and executive involved in this deal: Axxis Technology’s Mathew Dickerson.

Dickerson wrote SLAM (Service Level Agreement Model), a well-known book that helps MSPs to better manage their customer engagements.

Australia Land Grab

Hostech isn’t the only company making moves in the Australia managed services market. In recent months, most of the major US-based PSA (professional services automation) and RMM (remote monitoring and management) software providers have hosted events or user group meetings in Australia. Also, Kaseya launched a SaaS partnership with Ingram Micro Australia — a move that seeks to give resellers and VARs a springboard into the manged services market.

We’ll be watching to see how each of the moves play out.