Mergermarkets: Smartech Business Systems in talks to acquire Australian cybersecurity firms – CEO
“Smartech Business Systems, a Hong Kong-headquartered provider of mailing equipment and services, is in negotiations about acquiring two privately owned undisclosed Australian cybersecurity firms, President and CEO Vincent Nair said.
The company intends to close one acquisition in the next six months, and will then look at further cybersecurity acquisitions in Australia, Nair said.
Australia-based boutique advisor Mayfair Advisory Co is overseeing the acquisitions, he noted.
Cybersecurity will be a new business area for Smartech, Nair said, adding that while it is a crowded sector, the firm has 25,000 B2B clients in other business areas, posing opportunities to cross-sell, he said.
Earlier this month Smartech acquired Quadient Oceania (formerly Neopost Australia), securing its graphics operations and mail-related solutions distribution activities in Australia and New Zealand for AUD 6m (USD 4.6m).
Smartech sees Australia and New Zealand as its big growth opportunity, especially after the Quadient deal, which increased its B2B customers in both countries by 19,000, Nair said. Quadient Australia has annual revenue of around AUD 60m. Post-acquisition Smartech targets revenue of just over AUD 100m for 2021, he noted.
Following the move, Smartech plans to move its headquarters to Sydney within three months, and subsequently pursue a market debut on the Australian Securities Exchange (ASX) within 20 months, he said. Read more about the company’s IPO plans here.
Private capital raise
Smartech had financed the Quadient acquisition via shareholders and cash reserves, Nair said. However, potential deals ahead of an IPO would need private capital, and to this end, the company is holding talks with an undisclosed renowned Australian private equity firm, he noted.
Smartech is looking to raise around AUD 50m, which would mainly be used to finance acquisitions, the CEO said. The firm would likely cede a minority stake, he said, adding Mayfair is also advising the capital raise.
Smartech Business Systems is currently owned 50% by Nair via his company Macey Walton Holdings, and 50% by Texas-based David Moore of Smartech and Associates, Nair said.
Smartech’s main business is providing mailing solutions to enterprises, like mailing statements to customers on behalf of a client bank, right from printing, stamping, to coordinating with postal authorities, he said. The company provides the hardware, software and network solutions for these processes, he said. It also provides solutions directly to the postal services, including Hongkong Post, Pos Malaysia [KLSE:POS], Singapore Post [SGX:S08], and China Post, and is in conversations with Bangladesh Post about a large-scale automation project, according to Nair. Quadient Oceania is a provider to Australia Post, he added.
Nair noted that while there is a marginal decline of postal mail correspondence, he believes the transition to paperless will take another three to four decades, and “post offices will never go away”.
Smartech also has supplementing businesses, including software and IT managed services, office automation and supplies, hotel technology solutions, and business relocation services, and is looking to enter the cybersecurity sector via acquisitions, which will further future-proof the business, Nair said.
The company has offices in Hong Kong, Australia, Singapore, Malaysia, and China, and will add spaces across major cities in Australia and New Zealand with the Quadient acquisition, Nair said.”
by Christel Thunell in Sydney. (Mergermarkets-2021)
