Global consulting giant Accenture will pay $31 million to acquire Adelaide tech startup PrimeQ
Adelaide startup PrimeQ has attracted a $31 million takeover offer from global technology and consulting giant Accenture, with a deal set to be finalised next week.
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Adelaide startup PrimeQ has attracted a $31 million takeover offer from global technology and consulting giant Accenture, with a deal set to be finalised next week.
Under the terms of the agreement, Accenture will acquire all of PrimeQ’s shares, which are currently owned by more than 200 shareholders including the company’s founders, employees and institutional investors.
PrimeQ’s shareholders and ASIC have signed off on the deal, with its completion expected early next week.
Founded in 2016 by IT specialists Chris Downie, Michael Luyckx, Simon Cohen, Andrew McAdams and Andrew Treloar, PrimeQ sells and installs Oracle Cloud enterprise software to corporate clients, providing additional IT support and consulting services.
According to Federal Court documents, the five founders together control 45 per cent of the company’s shares, while other investors include ASX-listed asset manager CVC Limted and investment company Belgravia Group - led by Melbourne businessman Geoff Lord.
The two investment companies led PrimeQ’s $2 million capital raising last year, while Belgravia tipped in an additional $1 million in March this year.
In June last year, the former State Government provided a $500,000 grant to the company, to go towards a the launch of a “cloud campus” at its Kent Town base, including a 24-hour technical support and innovation centre and a graduate program to drive research and development.
The takeover is not expected to affect PrimeQ’s local operation in Adelaide, where it employs close to 70 staff.
In total, the company has more than 160 employees across Australia and New Zealand, with offices in Adelaide, Melbourne, Sydney, Perth, Brisbane, Auckland and Wellington.
According to its latest financial report, PrimeQ generated $28 million in revenue last financial year, with monthly revenue reaching $3 million by June.
The company said it reached profitability in August 2017, with a full-year after tax result of $481,000 compared to a loss of $5.8 million in the previous year.
It said the sales pipeline exceeded $200 million of “qualified opportunities”, with “strong earnings growth” expected.
The Accenture deal brings to an end PrimeQ’s earlier plans for a public listing, which had been flagged as a way to capitalise on the growing business appetite for cloud-based software systems.
The IPO had been expected to raise up to $10 million, valuing the company at around $50 million, and expected to fuel a growth strategy focused heavily on targeted acquisitions. In December, the company acquired fellow Oracle partner CRMNow, which has offices in Sydney and Melbourne.
Accenture is a management and technology consulting powerhouse, with more than 450,000 employees globally and offices in more than 52 countries. It is listed on the New York Stock Exchange, with a market capitalisation of more than $US100 billion.
PrimeQ and Accenture declined to comment on the deal.
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