NCS completes quad of investments in Australia, accelerates digital regionalisation with acquisition
Image caption (L-R): Ng Kuo Pin, CEO of NCS; Tristan Sternson, CEO of ARQ
· Acquisition scales up NCS NEXT in Australia with compelling end-to-end digital transformation value proposition for clients
· Completes quad of investments in Australia that transforms NCS into regional IT and digital powerhouse across Singapore and Australia
· Increases in-market headcount to 1,900 and accelerates digital talent development
AUSTRALIA, SINGAPORE, MONDAY 28 MARCH 2022: NCS – the technology services subsidiary of Singaporean-listed company Singapore Telecommunications (‘Singtel’) (SGX: Z74) – today announced its acquisition of fast-growing digital services firm ARQ Group (ARQ) in Australia for A$290 million. The move brings to scale NCS NEXT in Australia, which now offers a compelling end-to-end digital transformation value proposition for clients.
Headquartered in Melbourne, with offices in Sydney and Brisbane, ARQ is one of the fastest-growing digital services company in Australia. It has a long-standing 26-year history as an Australian digital services leader, stemming from Melbourne IT – founded in 1996 and one of the pioneers of the technology industry in Australia – and rebranded in 2018. A multi-award-winning local company, ARQ clients include Government agencies, more than half of Australia’s top 20 ASX companies, and household brands including Qantas, NAB, Australia Post, and Beyond Blue.
ARQ has been wholly acquired by NCS to join its digital innovation and services arm NEXT. Since December 2020, NCS has been scaling its presence in Australia through NEXT, which supports enterprises’ growing demand for digital transformation solutions. The acquisition will see ARQ continue to operate across its existing markets of Australia and New Zealand, and now expand its services into Asia.
The news comes two-and-a-half years after ARQ appointed Tristan Sternson as CEO. In his relatively short time as CEO, Sternson, has successfully grown the business, expanded into New Zealand and Canberra, and impressively increased talent from 320 to 560 staff, including nearly 100 people who they have successfully reskilled and retained through their bespoke ARQ Academy (ARQademy) education program during the pandemic.
ARQ’s revenue is projected to reach A$118M by end 2022 representing a year-on-year increase of 38 per cent, reflecting NCS’ confidence in the prospects of ARQ’s growth and expected synergies with the rest of its operations.
The latest growth phase of ARQ has been backed by Quadrant Private Equity who invested in 2020, and over the past two years, have been instrumental in the growth of ARQ to where it is today.
This investment is NCS’ fourth in Australia in the past 15 months as it expands its footprint in a market strategic to its regionalisation plans. NCS recently acquired Australia’s largest privately-owned IT services company, The Dialog Group (Dialog) following two previous investments: cloud consultancy Riley that specialises in Google cloud applications and a majority investment in cloud transformation specialist Eighty20 Solutions that has unique capabilities across Microsoft platforms.
Mr Ng Kuo Pin, CEO of NCS, said, “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. Combined with Dialog’s core IT capabilities and extensive reach across 8 Australian cities, ARQ brings on board the right digital competencies that help create a highly compelling end-to-end digital transformation value proposition. 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.”
Mr Tristan Sternson, CEO of ARQ, said, “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. 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. We intend to keep optimising NCS’ world-class IT and digital capabilities to keep building innovative solutions for our clients.”
As part of its transformational growth plan, NCS has been scaling its presence in Australia since December 2020 to serve Australian clients through NCS NEXT, its digital innovation and services arm - which supports enterprises’ growing demand for digital transformation solutions.
Ms Wynthia Goh, Senior Partner of NCS NEXT, said, “We look forward to welcoming ARQ into the NCS NEXT family. 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.”
ARQ’s 560-strong team will increase NCS’ headcount in Australia to 1,900 and build a robust tech talent pipeline to support the growing digital transformation needs of clients in the region. With increased workforce mobility, employees and future talents will be able to explore diverse and exciting career opportunities across various geographies and industries to serve clients through a hybrid delivery model.
ARQ embraces a strong people culture and its talents adopt an innovation-first mindset to design and develop solutions – evident in their 572 technical certifications, 62 design awards and 17 certified partnerships. NCS’ focus on an apprenticeship-based learning culture is similar to ARQ Academy’s emphasis on self-learning and innovation, and the combination of both teams will reinvent talent development and answers the tech talent crunch in both Australia and Singapore.
The acquisition is subject to the receipt of the relevant regulatory approvals and is expected to complete by May 2022.
NCS was advised by Allen & Overy and Deloitte. ARQ was advised by Gilbert & Tobin, PWC and Tooronga Advisory.
ARQ Group is a multi-award-winning digital and tech services firm with a client base spanning Government, enterprise, and more than half of Australia’s top 20 ASX-listed companies. A local company with a 26-year heritage of technological innovation, ARQ also delivers advisory, design and managed services of digital solutions. As part of its transformation since 2019 and under the leadership of Australian tech pioneer and CEO Tristan Sternson, the company launched education programs ARQademy, TDx, and ARQ Bootcamp, designed to provide meaningful impact on the local skills shortage. For more information, visit arq.group.
NCS, a subsidiary of Singtel Group, is a leading technology services firm with presence in Asia Pacific and partners with governments and enterprises to advance communities through technology. Combining the experience and expertise of its 10,000-strong team across 55 specialisations, NCS provides differentiated and end-to-end technology services to clients with its NEXT capabilities in digital, cloud and platforms, as well as core offerings in application, infrastructure, engineering and cybersecurity. NCS also believes in building a strong partner ecosystem with leading technology players, research institutions and start-ups to support open innovation and co-creation. For more information, visit ncs.co.