Telstra leans into IT services; prepares binding offer for Versent

afr.com:

There’s been no lack of appetite from Telstra for security-flavoured assets. The country’s largest telco was the underbidder in the Azure Capital-run sales process for Tesserent, the ASX-listed cybersecurity company snapped up by French defence giant Thales in June. And it has been sniffing around BGH Capital’s CyberCX, Tesserent’s larger rival.

Underscoring this interest is the decision, under newish Telstra chief executive Vicki Brady,to hold onto its $15 billion infrastructure business as it leans more heavily into the information technology space.

With a boom in artificial intelligence and cloud computing, it’s clear where Telstra sees its future – and it’s not in telephone calls.

Vicki Brady has been shifting Telstra’s strategy since taking the top job. Dominic Lorrimer

Now Street Talk can reveal Brady’s biggest bet to date. Telstra is preparing to table a binding offer for up-for-sale Versent on Monday. Investment bank Goldman Sachs has been marketing the Melbourne cloud transformation and consulting group and a deal is expected to be worth some $400 million.

Versent provides cloud transformation and security products and services. The business, started by former National Australia Bank technology executives, has increased revenue by 35 per cent-plus (on a compounded annual growth rate basis) over the past five years. It’s now sitting at the $150 million mark and sees a pathway to $300 million revenue within three years, thanks to market share wins and South-East Asia expansion, according to a sale flyer sent to prospective buyers by Goldman earlier this year.

The marketing document reminded investors of big companies’ shift to the cloud: more than 85 per cent wanted to be cloud-first by 2025 and 70 per cent