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Newly listed consulting services group StepChange Holdings (ASX: STH) is buying Perth-based ICT advisory firm BroadReach Group in a cash-and-scrip deal worth up to $4.3 million.
The move gives StepChange one of Western Australia’s most established ICT advisory firms with strong long-term relationships across government agencies while expanding its capabilities in enterprise architecture, strategy and digital transformation advisory.
StepChange, also a Perth-headquartered company which listed on the ASX in July, is paying $1.6 million in cash and $900,000 in shares for BroadReach Group with the $2.5 million up-front payment potentially supplemented by a $1.8 million earnout pending profit targets being met.
BroadReach was founded in 2008 by Peter Mason and Greg Kirk and specialises in public safety, justice and the health and aged care industries.
The listed company is currently chaired by Perth businessman Geoff Lewis and led by managing director Shane Bransby.
Among major government clients the company has worked with are WA Police, Department of Communities, Synergy, the Department of Primary Industries and Regional Development, and the Department of Water and Environmental Regulation.
“BroadReach is a high-quality advisory firm with deep expertise in top-of-stack ICT strategy and enterprise architecture, with long-running engagements across WA Government,” says Bransby.
“This acquisition enhances our capabilities, diversifies our client base and creates significant cross-sell opportunities across both organisations.
“Importantly, it positions StepChange to play a larger role in major public-sector digital transformation programs while strengthening our ability to deliver high-impact upstream ICT advisory and architecture services that are increasingly driving enterprise cloud and ERP (enterprise resource planning) initiatives.”
BroadReach delivered revenue of $8.96 million in FY25 and normalised EBITDA of about $940,000, with the acquisition by StepChange representing a multiple of up to 4.6 times underlying earnings should the earn-out targets be achieved.
StepChange says the acquisition will strengthen its capabilities in strategic ICT enterprise architecture, business analysis and solution design, all of which sit upstream of major ERP and digital transformation programs.
The acquisition also diversifies the company’s client base with additional Tier 1 organisations and several state government departments, which the company says provides access to “long-running programs under WA’s ICT procurement frameworks”.
“These engagements create a strong platform for future SAP, cloud and systems-integration work,” says the company.
“Combining BroadReach’s architecture services expertise with StepChange’s SAP, cloud migration and ERP transformation capability enhances the company’s ability to lead end-to-end digital programs from architecture strategy through to implementation and delivery.”
StepChange, which expanded into the US last month by opening an office in Houston, Texas, posted revenue of $42.53 million in FY25 and EBITDA of $4.02 million, both of which were just ahead of the prospectus forecast.
The company announced on 10 November that it had secured a $11 million in debt facilities with Westpac Banking Corporation (ASX: WBC) to pursue growth opportunities including acquisitions.
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