xAmplify merger with CSO Group falls through

The merger between xAmplify and CSO Group to form MARQ1 has fallen through, but both businesses are still working together.

Both businesses agreed to return to a strategic partnership model that would reflect each of their respective strengths after the break-up took place in the second half of 2024, xAmplify CEO Wayne Gowland told ARN.

“Our decision was made following careful consideration of how best to maintain momentum on our strategic goals,” he said to ARN.

“As one of Australia’s fastest-growing digital transformation partners, we felt we could better serve our clients by remaining independent, focused on delivering innovative, human-centred solutions across AI, automation and secure digital infrastructure.”

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Both xAmplify and CSO Group announced the merger in June last year. The aim of the combined company would be to create one of the largest Australian-owned and operated integrators of artificial intelligence (AI), cyber security, technology and business automation services. 

At the time, CSO Group CEO and founder Michael Simkovic said the proposed combined business would have a “gross turnover exceeding $100 million annually”.

“We see an enormous market and growth opportunity to disrupt and challenge the traditional large global service provider models,” he said back in June 2024.

The businesses started working together because they saw a cyber security play within the ServiceNow space and was already doing some deployments and engagements with customers, Simkovic continued.

“When we started seeing all these pieces coming together and looked at our business and we saw a very strong level of cultural alignment, which is critical in any merger agreement,” he added.

At the time former VAST Data managing director Howard Fyffe was brought on as chief revenue officer a month after the initial merger announcement, tasked with integrating the two organisations’ sales team.

In the role, he was responsible for defining a unified national sales and go-to-market strategy to bring a sophisticated suite of solutions to advance and protect government and corporate clients digitally.

A few months after Fyffe’s appointment, both businesses came out to announce in September the merged brand as MARQ1.

At this time, the merger was expected to be finished by October with Simkovic to the new company’s CEO and Gowland as its COO.

The brand name reflected both organisations’ goal of leaving a lasting mark on their customers by solving real-world challenges and delivering a powerful impact on each industry they touch.

“MARQ1 represents the synergy and shared vision of CSO Group and xAmplify,” Gowland said in September 2024. “It demonstrates our commitment to delivering unparalleled value to our customers, applying our combined intelligence and capabilities to solve real-world challenges for our clients.”

With the combined company now no longer progressing, Fyffe has left the organisation.

Meanwhile former federal chief revenue officer (CRO) Tom Scicluna was promoted to xAmplify’s full CRO on 18 June.

Scicluna has been with the AI-focused managed services provider (MSP) for five years, initially serving as business engagement and capability before transitioning to COO and then federal CRO in July last year.

“He brings strong expertise in scaling delivery across complex digital transformation programs and will continue to lead our go-to-market efforts across key industries and government sectors,” Gowland said.

xAmplify moves ahead

Despite the merger breakdown, xAmplify announced on 20 June that it secured a “significant equity investment” from Macquarie Capital Principal Finance.

xAmplify’s leadership team, expertise and “forward-looking platform” align with Macquarie Capital’s view of the capabilities needed for digital transformation, added Macquarie Capital Asia Pacific head of principal finance Newton Gillies.

The investment is expected to accelerate its national expansion, including new offices in Melbourne and Brisbane, following the recent opening of a Sydney location.

Additionally, the MSP plans to strengthen its delivery of AI-driven, automated and secure digital transformation services to government and enterprise clients.

“Australia’s digital priorities are shifting fast,” Gowland said. “From sovereign data management to AI adoption, we need scalable, smart infrastructure and solutions that are built and delivered by people who understand the local context.

“Partnerships like this give us the momentum and capital to expand our national footprint, pursue targeted acquisitions and extend the reach of our AgileOps platform to organisations prioritising automation, security and agility.”

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