Publicly listed MOQ Digital has confirmed Brennan IT as the superior bidder for the organisation as the acquisition race heats up.
On 8 August, MOQ told shareholders a ‘confidential' third party offered $0.066 cash per share, valuing the business at about $20.5 million, but didn't name who it was until a separate shareholder update that revealed Brennan VDI as that 'third party'.
This is a 10 per cent premium on the cash offer that Atturra put on the table last week. Atturra has been given until 11 August to match the offer or provide more favourable terms.
“We are excited to be taking this step forward in our vision to become Australia’s largest technology company," Brennan founder and managing director Dave Stevens said. "With over 25 years in business, our heritage as one of Australia’s largest and most successful managed services providers has recently been bolstered by two acquisitions.
"Our strategy of fully integrating acquisitions means our customers and our staff quickly get the full benefits of the merged entities."
Brennan continues to expand its transformation capabilities to match the strength in its managed offerings, if the Scheme is implemented, the MOQ acquisition will offer both complementary services and geographic expansion.
Stevens has long held an interest in MOQ, currently owing 8.6 per cent of the total MOQ shares on issue.
Dentons is acting as legal adviser to Brennan. Monash Advisory is financial adviser and Thomson Geer is legal adviser to MOQ.
Atturra put in a bid to fully acquire publicly listed IT services provider MOQ Limited for $15 million on 30 June in a move that could create "one of Australia’s largest IT services businesses".
The IT consultancy, formerly known as FTS Group, had offered to buy 100 per cent of MOQ’s shares for $0.05 cents in cash per MOQ share as part of a Scheme of Arrangement at the time.
Atturra made a revised offer on 5 August, increasing it by 20 per cent to $0.06, pushing the deal price to $18.6 million.
The acquisition attempt comes as MOQ informed shareholders of its ongoing operational challenges and trading losses.
In particular, MOQ cited its unprofitable professional services contracts, although it claimed to have made “significant progress” on fixed fee arrangements.
In December 2021, MOQ said it would conduct a review of its professional services business and operations following a $3.5 million write-off and provide for contract cost overruns.
“We are confident that this merger will have a positive impact for both our existing and future customers by leveraging the combined group’s significant experience, product knowledge, IT expertise and resources,” MOQ non-executive chairman David Shein said at the time.
“The Atturra transaction will provide significant career opportunities for our staff and we look forward to the journey ahead.”
Brennan IT has been active in the acquisition space lately, snapping up the likes of Sydney-based tech consultancy Clade Solutions in January.
That purchase involved bringing more than 60 employees into the fold and delivered an expanded footprint in Brisbane, Melbourne and Darwin.
Clade is managed as a separate business within Brennan with its CEO, Duncan Journee, continuing to lead its momentum in the market.
This was in addition to the purchase of Forsythes Technology in August last year that served up access to 150 regional businesses spanning the Newcastle and Hunter areas.