Australia’s managed service provider (MSP) industry is consolidating, as it rides the tech innovation slipstream, fuelled by client investment in cloud migration, cyber security and artificial intelligence.

Finding adjacent opportunities

DJC Systems, founded by Daniel Church in 1999, is a managed service provider, specialising in IT infrastructure and cloud adoption solutions.

Aware of industry dynamics, Church is positioning DJC Systems for scale.

“If you aren't growing and matching what's happening around you, you may become obsolete. Bigger companies invest in automation, artificial intelligence and training, with economies of scale giving them buying power,” says Church.

It’s this growth push that has Church seeking strategic M&A opportunities, with focus on aligned businesses that could:

• Bring a competitive advantage
• Enable reach into new locations
• Offer more products and services.

When a mature, complementary MSP came on the market, its appeal was that it would give DJC Systems a solid presence in New South Wales, along with other synergies.

 “It’s a great business, with strong systems, platforms and processes, that as a merged entity would create this really mature base for us to make other acquisitions from. A transformational merger is how I describe it.”

When the sale was agreed by both parties, decisions around how to fund, and structure the acquisition became key.

Structuring the deal

It was important to find a funding partner that could structure the deal in a way that directors weren’t required to use personal assets as collateral.

“Macquarie Business Banking looked at our business, and the business we were looking to purchase, asked lots of questions and got it all done for us,” says Church.

“They took a deeper look, and have a genuine understanding of what our businesses does, with authentic interest in our growth,” says Church.