Dominic O’Hanlon (CEO - Rhipe)
Rhipe has entered into a binding agreement to acquire Queensland-based Microsoft partner Dynamics Business IT Solutions (DBITS) in a $4.5 million deal, potentially rising to $8 million.
The privately-owned business operates as an IT services, integration and support business provider with a focus on Microsoft Dynamics 365 Business Central.
The $4.5 million consideration includes $3 million payable in cash "funded by existing cash resources" and $1.5 million payable through Rhipe ordinary shares.
A further deferred consideration of up to $3.5 million could be payable over the next two years post acquisition, comprising of cash and shares, contingent on achieving financial targets "in excess of the expected contribution".
The acquisition is part of the distributor's strategy to provide the "best platform", enablement and 24x7 support services around key Microsoft technologies.
Furthermore, the acquisition will add implementation and support services to Rhipe's capabilities allowing it to broaden its services across the market.
Rhipe partners, who have been purchasing Dynamics and Dynamics 365 licenses from the distributor, will now also have access to consulting services and support in what the company described as a "reseller friendly manner".
"Rhipe believes that the acquisition of DBITS also cements the Company’s position with Microsoft as a strategic, high value-add distribution partner for Microsoft’s most important cloud product subscriptions in the Asia Pacific region," the company told shareholders on 30 January.
Rhipe will further invest in its Dynamics activities immediately post acquisition aimed at accelerating growth in this area.
Meanwhile, DBITS is expected to contribute circa $1 million earnings (EBITDA) in FY20 before any synergies and additional investment in the business' go forward Dynamics business.
The acquisition is expected to be completed in February.
