Done deal: Telstra buys cloud services biz Versent for $268m

Listed telco Telstra has agreed terms to buy cloud services business Versent for $267.5 million, after seeing off rival bidder Japan’s NTT as flagged by Street Talk on Monday.

Confirming the acquisition on Wednesday, Telstra said Versent would help it scale the Telstra Purple tech business and drive NAS growth. It expects to complete the deal in six weeks. Analysts called the acquisition “financial immaterial, strategically important.”

Telstra was advised by Record Point and Gilbert + Tobin, while Goldman Sachs was on the sell-side. Early expectations were for Versent to fetch a price tag as high as $500 million.

Versent provides cloud transformation and security products and services. The main attraction for bidders was its proprietary cloud software, called Stax, which manages Amazon Web Services cloud computing environments.

It posted $130 million net revenue for the 2023 financial year, representing 17 per cent compounded annual growth rate over three years. The company employs more about 500 experts and has a client book chock-full of blue-chip clients – 40 per cent of ASX100 companies use its services.

The deal marks the end of a year-long sale process.