Credit: Dreamstime
Following a bumper year of mergers and acquisitions (M&A) in 2021, the Kiwi channel has continued with a strong trend of deals struck in 2022.
In 2021, New Zealand’s M&A market saw an overall increase in deal volume of 55 percent with New Zealand’s tech sector delivering 30 deals to achieve 24.2 percent of the overall number.
The majority of deals struck during 2022 saw companies looking for expansion into new markets, customers, regions, and skill areas.
Global companies continued to eye Kiwi technology businesses as opportunities to capture the local market, alongside innovative tech solutions and specialized talent.
Locally, New Zealand’s regions are continuing to demonstrate their strength in technology, with Wellington in particular the base for many of the year’s M&A deals.
Regional technology innovation
Cello kicked off 2022 nabbing Wellington-based network specialist Pentech Communications to bolster consultancy and professional services capabilities, which was earmarked as a potential area of growth for Cello.
Palmerston North-based Advantage bought Nspire Technologies, opening a beachhead into the Wellington market. The deal added to Nspire’s 15 staff to reach a total of 60 for Advantage.
Solutions provider Theta acquired Wellington-based data analytics firm Inhouse BI, a specialist in Microsoft Power BI and SAP Business Objects. Theta’s twelfth acquisition since its inception in 1995, the deal widens Theta’s geographical footprint and strengthens Wellington’s tech base.
Further afield, newly-formed Southland business T4 Group finalized the acquisition of Northland-based Advanced Data Centers (ADC) as part of its mission to provide regional New Zealand access to colocation data centers and reliable, secure, green and economically viable data networks.
Cross-industry reach
Technology companies with solutions for a wide range of industries including film, health and safety, primary industries, and accounting featured among the 2022 deal line-up.
Autodesk targeted its second Kiwi film technology company with the acquisition of Moxion, following a deal struck with Weta Digital in 2021, in an effort to boost Autodesk’s media and entertainment capabilities.
Lancom Technology acquired a majority stake in health and safety software provider HSE Connect, bolstering the IT services provider’s portfolio of software-as-a-service (SaaS) products.
NZX-listed trade tech company TradeWindow inked a conditional agreement to buy the business and assets of Rfider, in a move aimed at helping TradeWindow extend its reach deeper into primary industry supply chains.
The deal gave TradeWindow positive exposure to an estimated $16.8 billion worldwide market opportunity for food traceability.
MYOB also bought one of its major Kiwi partners, Auckland-based ERP specialist Aztech Solutions, adding to its pool of in-house sales and service specialists.
Trans-Tasman deals struck
Partnerships with companies across the ditch were strengthened in 2022, with Australian IT services provider Seisma Group acquiring AWS and Salesforce partner Fronde Systems, becoming the company’s sole shareholder in a deal valued around $8.5 million.
Australian-listed hybrid cloud specialist Nexion bought Wellington IT service providers Aiscorp and Silicon Systems for NZ$14.3 million, tripling the size of Nexion to A$18.3 million in pro-forma revenue in 2022. The deal provided a base for future expansion into the Americas, Nexion said.
Further, Australian cyber security services supergroup CyberCX acquired New Zealand MSSP Cyber Research NZ to shore up its services offerings across New Zealand as well as in Australia.
Global powerhouses look to New Zealand
Global companies continue to eye ways to reach, and grow, New Zealand markets.
In its first acquisition in the region in 11 years, Fujitsu acquired cyber security company InPhySec to strengthen its security services capabilities and provide Fujitsu’s New Zealand customers with access to specialist security consulting and managed services.
US-based Pax8 made waves expanding into the New Zealand market through acquiring Microsoft cloud specialist Umbrellar, which Pax8 said was key to its growth in the New Zealand market.
Umbrellar CEO Dave Howden and his leadership team remain in place with a continued focus on driving outcomes for business partners based in New Zealand.
The final stage of the integration of Empired and Intergen into Capgemini was also completed in 2022, when they jointly rebranded as Capgemini New Zealand. The Paris-based global consultancy completed its A$233 million buyout of Empired in 2021, significantly increasing Capgemini’s presence across A/NZ.
Telcos nail down priorities
In the telco space, Vodafone NZ (soon to be One New Zealand) bought out its joint venture partner Millennium Corp in the network of 52 Vodafone-branded retail stores throughout Aotearoa, in the culmination of a partnership that began 26 years ago.
Spark nabbed a 37.6 percent share of internet of things (IoT) provider Adroit and two seats on its five-member board, reinforcing its commitment to IoT as a key future growth market.
The telco also completed the sale of a 70 percent interest in its TowerCo business to the Ontario Teachers’ Pension Plan Board for $900 million forming a new entity called ‘Connexa’.
The entity played an integral role as 2degrees sold its passive mobile tower assets to Connexa and its funder the Canadian Teacher’s Pension Plan for $1.08 billion in December.
2degrees CEO Mark Callander said the move would enable further investment in the company’s 5G build and increase the focus on 2degrees’ core business.
2degrees and Vocus NZ also officially merged to become the country’s third-largest telco, with an annual turnover of $1.2 billion. 2degrees was sold to managed funds of Australia’s Macquarie Asset Management and Aware Super for $1.7 billion in 2021, who already owned Vocus and Vocus NZ, enabling the merger.
.