Publicly-listed cloud software distributor Rhipe has acquired New Zealand IT services provider Parallo in a deal worth at least NZ$4.25 million.
Originally starting life as a managed services business unit of VMware professional services business ViFX, the Auckland-based Parallo bought out the original ViFX shareholders and entered the market under its own name in 2017 with a deliberate focus on managed services, backed up by solid professional services capabilities.
The company maintains a deep relationship with Microsoft in New Zealand, building off four years of Microsoft Azure expertise in the market, while also leveraging expertise across VMware and Commvault solutions and services.
Indeed, Parallo has made a point of investing in developing service offerings focused on Microsoft Azure and VMware software, Rhipe’s two largest software vendors.
Broadly, the company focuses on customer solutions across both Microsoft Azure and on-premises infrastructure for its clients in New Zealand and Australia.
The Rhipe purchase includes Parallo’s products, solutions, assets and intellectual property (IP), such as the Parallo Automation Library, which provides technical expertise on managing Azure at scale. Parallo’s 25 employees will also join Rhipe as part of the deal.
While the company’s co-founder and CEO Symon Thurlow will remain as a director after the acquisition, the other board seats of the business will be filled by Rhipe directors.
“Together with my co-founders Nicole Schaefer and Shaun Webber, we are excited to be joining the rhipe family and believe this a pivotal step for our customers and employees to align with rhipe’s partner-centric focus and channel,” Thurlow said. “We will also benefit from greater support, capital and structure to propel our offering into the future.
“With deep domain knowledge of the challenges partners face in building out their cloud practices, we understand the need to demonstrate consistent growth. As an Azure, VMware and Microsoft technology specialist, we support partners with development opportunities and application services capabilities, so they can continue to grow,” he added.
For Rhipe, the acquisition will underpin the Australian-listed cloud software specialist’s ongoing efforts to provide partners with the latest infrastructure technology support.
Rhipe expects the Parallo buy to deepen its offering to its partner ecosystem. Parallo was recently accredited as a Microsoft Azure Specialist for independent software vendors (ISVs), a factor Rhipe claims will add greater value to its partners.
“Parallo has done an outstanding job as one of the leading IT service providers, delivering cloud-services and solutions that drive value to their local ISV market,” Rhipe CEO Dominic O’Hanlon said. “This investment is significant in helping us achieve an enhanced product and services offering initially in New Zealand and Australia.
“Having worked closely with Parallo for over nine years, there are a lot of synergies between our business objectives, solutions and target market.
“We intend to continue investing in the Parallo business to support its expansion into the Australia market, leveraging Rhipe’s existing employee and partner footprint. We look forward to utilising the skills and expertise of the Parallo team, combined with Rhipe’s extensive channel, to deliver greater outcomes for our partners,” he added.
In addition to the upfront cash price of NZ$4.25 million, there will be an additional consideration tied to the reported pre-tax earnings (EBITDA) financial performance of the acquired business in the first 12 months and the following 12 months of the acquisition.
The acquisition is expected to complete in the next four weeks and, excluding transaction costs, is expected to deliver earnings per share accretion in FY21.