CodeBlue sold in deal worth up to $15m
IT services company sold offshore.
Auckland-based IT services company CodeBlue has been sold to an Australian outfit, ASX-listed CSG.
CodeBlue specialises in the small-to-medium enterprise market, which it defines as 30 to 300 seats.
According to a document filed by CSG with the ASX, the deal is for $5.0 million cash, plus an additional $2.7 million if 2016 targets are met. Further earn-out payments are possible if 2017 targets are hit. The total value of the deal is capped at $15 million (all figures are in $NZ). NBR understands the earn-out targets are "friendy."
CodeBlue has 160 staff and 350 customers around New Zealand. CSG claims more than 15,000 customers. It already has clients on this side of the Tasman including BNZ.
Going into the deal announced today, its two largest shareholders were founder Ken Davis (47.71%) and Chris Mackay (also 47.1%), a long-time director and Computerland alumni who recently replaced Mr Davis as chief executive.
Mr Mackay tells NBR both he and Mr Davis will be sticking around. There will be no changes to the mangement team or its strategy, he says. He would not answer a question about what multiple of sales or profit was represented in the sale price.
CSG has a heavy focus on "as a service" cloud offerings, including "board room as a service," "communications as a service" and "desktop as a service."
Its FY2015 revenue was $A220 million, a 13% increase on the previous year.
Underlying net profit rose 12% to $A23.1 million.
The company is issuing $A30 million in new equity, in part to cover the cost of the CodeBlue acquisition.
CSG shares have soared 41% this year. The stock is rated a 'buy' based on the consensus of four analysts polled by Reuters.
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CodeBlue sold in deal worth up to $15m
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