rhipe acquires Microsoft Dynamics partner for up to $8 million

By:  Michael Jenkin

Aussie cloud specialist distributor rhipe has acquired Microsoft Dynamics 365 partner Dynamics Business IT Solutions for up to $8 million in cash and shares.

Dynamics Business IT Solutions, or DBITS, is a privately-owned, Queensland-based IT services integration and support business, focused on services centred on the Microsoft ERP system.

The deal represents the broadening of rhipe’s services to support its partners across Asia-Pacific, with Microsoft Dynamics consulting capabilities in increasing demand from partners.

“The challenge with Dynamics for many of our resellers is they don’t have the consulting capabilities in order to implement Dynamics. It’s a lot different to implementing Office 365,” rhipe chief executive Dom O’Hanlon told CRN.

“The idea in the acquisition is to make that capability available to our resellers.”

Dynamics and Office 365 licenses have traditionally been available to partners through rhipe’s PRISM platform, and they will now also have access to rhipe’s own Dynamics consulting services and support in a reseller friendly manner, the company advised in an ASX update.

rhipe has enjoyed growing success with Microsoft’s clouds, particularly Office and Azure. The distie reported that its CSP Office 365 seat count had cracked 325,000 at the time it reported its Q1 results for the 2019 financial year in November.

O’Hanlon said Microsoft’s increasing focus on Dynamics made it a logical extension for their strategy to align. Rhipe noted its acquisition of DBITS cemented its place as a strategic distie partner for Microsoft’s most valuable cloud products in the region.

The upfront value of the acquisition is $4.5 million, $3 million of which will be paid in cash, while $1.5 million is payable using rhipe ordinary shares. The number of shares to be issued will be based on a five-day weighted average price prior to completion of the deal. A further $3.5 million, comprised of cash and shares will be paid after the completion of the deal, subject to achieving financial targets.