The Riverside Company seeks to acquire Wollongong-based IT business

to rival sponsor Blackstone, The Riverside Company is back and preparing to bet big on Australia’s fast-growing technology sector.

Street Talk understands Riverside, which is led locally by Melbourne managing partner Simon Feiglin, is in advanced talks to acquire Wollongong’s Virtual IT Group, a full-service information technology outfit that makes $15 million a year at the earnings line.while Riverside has drafted in PwC to arrange the debt, sources said. It is believed PwC will look to secure backing from a handful of credit funds to bankroll the purchase.

Riverside managing partner Simon Feiglin helped grow Energy Exemplar from a small Australian firm to a global power market leader. Now. he’s back and has a new target in mind.The mooted sale comes after Virtual IT fielded interest from a bunch of private capital players last year, prompting its shareholders, led by chairman Christian Pacheco, to retain Allier Capital to help find a growth capital partner.

At the time, Virtual IT Group was compared to cybersecurity specialist Versent, which was put up for sale via Goldman Sachs and ultimately sold to Telstra. The business had a client book chock-full of ASX 100 clients and made $130 million net revenue in the last financial year. Telstra paid $267.5 million.Sources said Virtual IT was likely to fetch a low double-digit earnings multiple of between 10 and 12 times.

Sources said Riverside’s rationale centred on Virtual IT’s industry-leading margins, and the fact the country’s outsourced IT services sector is growing at 10 per cent to 12 per cent a year.has co-edited Street Talk since 2009, specialising in private equity, investment banking, M&A and equity capital markets stories. Prior to that, she spent 10 years in London as a markets and M&A reporter at Bloomberg and Dow Jones.is a co-editor of the Street Talk column.

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