NCS strikes again with $290 million acquisition of Arq Group

28 March 2022 Consultancy.com.au 2 min. read
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Melbourne-headquartered digital consulting and services firm ARQ has been sold to NCS for $290 million – marking the Singtel subsidiary’s fourth local acquisition in the space of fifteen months.

Singtel’s tech services subsidiary NCS has struck the Australian market for the second time this month, acquiring digital services firm ARQ Group for $290 million.

A team of 560 professionals spread across offices in Melbourne, Sydney and Brisbane will now join NCS’s digital innovation and services arm NEXT, taking its overall local headcount to around 1,900 after four acquisitions made in just the past fifteen months.

NCS strikes again with $290 million acquisition of Arq Group

“This latest acquisition completes a jigsaw of strategic investments in Australia, ramping up our presence in a market that is critical to our regional expansion,” said NCS CEO Ng Kuo Pin. “Taken together, our four investments to date have given us the necessary scale, capabilities and credibility to compete as a regional digital powerhouse as we help governments and enterprises in Singapore and Australia achieve their digital transformation goals.”

Headquartered in Melbourne, Arq has a heritage dating back to 1996, peeling off from Melbourne IT at the beginning of 2020 as an enterprise services division bought for $35 million by private equity firm Quadrant and members of its current management team, including CEO and managing director Tristan Sternson.

Since then, the company has grown its headcount by two thirds as is expected to achieve 38 per cent growth this year to revenues of $118 million.

“Joining the NCS family is a tremendous opportunity to continue growing the business as it now allows us to go international and serve regional clients besides capturing more domestic market share by leveraging synergies within NCS,” said Sternson. “We are well primed for expansion, having grown our government footprint to over a third of our business, acquired many new customers and hired 300 new talents on board.”

For NCS (which was advised by Allen & Overy and Deloitte, while Gilbert & Tobin and PwC served Arq on the deal), the firm says that the latest acquisition provides it with a highly compelling end-to-end digital transformation proposition and will transform it into regional IT and digital powerhouse across Singapore and Australia.

The bolt-on follows the $325 million purchase of the Dialog Group earlier this month, and previous pick-ups Riley and Eighty20 Solutions.

“We look forward to welcoming Arq into the NEXT family,” said Singapore-based NEXT senior partner Wynthia Goh. “Arq’s highly experienced and scalable agile teams will become part of NEXT as one regional digital team to serve clients across the region in the post-pandemic era. Together, we will unlock more synergies between Australia and Singapore and enable cross-pollination of tech innovation.”