PS&C Ltd (ASX:PSZ) is acquiring business and technology consulting company Seisma Pty Ltd and shares have responded positively, rallying 10%.
Seisma is a specialist technology services company with more than 120 employees, possessing a strong footprint across the financial services, communications and utility sectors.
It is expected that Seisma will generate revenues of $21 million in fiscal 2018, increasing by around 30% to $28 million in fiscal 2019.
Acquisition would broaden addressable market
Consequently, this transaction should improve PS&C’s growth profile, while broadening its areas of expertise and providing increased earnings predictability.
PS&C managing director Glenn Fielding said: “We identified the need to increase our presence in the growing areas of digital enterprise and information management and analytics.
“Seisma has shown itself to be a growing IT provider and a specialist in these areas.”
Increased revenues from non-discretionary spending
“With the acquisition of Seisma," he said, "the combined businesses would provide the group with more than 400 billable IT consultants."
The acquisition is also expected to strengthen the company’s proportion of revenues from non-discretionary spending areas such as utilities, communications and banking.
Due diligence is expected to be completed no later than April 25.