Versent deal: NTT bows out, Telstra in pole position

afr.com:

Telstra is well-placed to land up-for-grabs cybersecurity play Versent.

Japanese telecom giant NTT Group has been considering a bid for Versent as has Vicki Brady-run Telstra. Natalie Boog

Street Talk understands Japan’s NTT, one of the world’s largest telecoms groups, has dropped out of the auction following protracted negotiations with sell-side adviser Goldman Sachs.

That leaves the ASX-listed telco behemoth in pole position, and expected to sign on the dotted line in the coming days.

Telstra’s appetite for the asset was revealed by Street Talk in early September. Chief executive Vicki Brady later confirmed the company, advised by Record Point and Gilbert + Tobin, was participating in the sale process.

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’s expected to be worth about $400 million, although earlier estimates suggested it could fetch up to $500 million.

If Telstra and Goldman Sachs reach a deal, as expected, analysts reckon Versent could transform the $44 billion telco into a full-service IT provider. It will also see founders, Thor Essman and James Coxon, who are shareholders alongside Washington H. Soul Pattinson and the Hains family’s Portland House, pocket a hefty cheque. 

An information memorandum sent to prospective buyers in May showed Versent had grown revenue by 35 per cent-plus (on a compounded annual growth rate basis) over the past five years and was sitting at the $150 million mark. The company predicted it could reach $300 million revenue within three years.

The IM also said Versent’s services division had delivered more