Riverside backs Wollongong IT powerhouse VITG as M&A opportunities beckon

Riverside backs Wollongong IT powerhouse VITG as M&A opportunities beckon

Virtual IT Group founder Christian Pacheco.

Virtual IT Group (VITG), a Wollongong-based managed service provider (MSP) that has worked with tech giants such as Microsoft, has announced today that it has secured investment from global firm The Riverside Company.

Founded in 2015 by Christian Pacheco, VITG provides full-service IT support, cyber security services, cloud services and disaster recovery solutions to more than 1,200 clients and 25,000 workstations worldwide. The company utilises artificial intelligence to improve response and resolution times, leading to net gains in productivity.

The firm, which employs 200-plus local staff, aims to service mid and large-size enterprises.

While the investment amount is undisclosed, Pacheco told Business News Australia the majority of the funds will be used to improve the existing platform and bolster the group’s merger and acquisition (M&A) activity.

“Over the past five years, we've done 14 acquisitions. Now we're looking to ramp it up with the right partner, which is Riverside, and take it to the next level. We're looking for businesses that specialise in managed services, security and cybersecurity to bolster VITG,” said Pacheco, who is a three-time Australian Young Entrepreneur Awards Technology category winner.

“Riverside is like-minded in terms of people and culture, which has been positive. I felt like they presented a true partnership strategy. They had a very unique focus on not only the M&A side of the growth strategy, but also organic growth.”

Based in New York, New York, The Riverside Company is a global firm that has made more than 1,00 investments since its founding in 1988. The group’s international private equity and flexible capital portfolios include more than 140 companies.

The news of the firm’s investment comes six months after Riverside Company cashed out from the $1.6 billion sale of Energy Exemplar – an Adelaide-based company that sells price prediction software – to Blackstone and Vista Equity Partners.

According to US-based tech research and consulting firm Gartner, IT spending in Australia is projected to exceed $133 billion in 2024, representing an increase of 7.8 per cent compared to 2023. IT services remains one of the largest IT spending categories, forecast to reach more than $48.8 billion.

“Investing in high-quality technology-oriented B2B (business-to-business) businesses like VITG has been a priority for Riverside over many years,” Riverside principal Nicholas Pejnovic said.

“We bring access to a global network of experts to support the growth of these companies, which is one unique factor that Riverside offers its portfolio companies.

“We’re excited about Riverside’s investment in VITG and looking forward to partnering with such a high-calibre and ambitious management team.”

Riverside was advised by Ad Astra Corporate Advisory and Herbert Smith Freehills on the deal. VITG was advised by Allier Capital and KPMG Law.

“This partnership will allow VITG to increase focus on organic growth and continuously enhance the quality service clients are accustomed to, supported by VITG’s significant edge in automation,” Riverside principal Kevin Xu added.

“We will build out specialisations by industry and technical capability, and continue to execute on strategic add-ons.”

The news comes almost two years after VITG announced plans to roll out its patented "digital engineer" technology Pia following strong global interest garnered from a beta launch.

As a separate company that sits under the umbrella of VITG, Pia stands for 'predictive intelligent agent', allowing managed service providers (MSP) and in-house IT teams to remove repetitive tasks such as user creation, password or virtual private network (VPN) resets, domain name system (DNS) flushing, and active administration changes.

When asked if the funds would help with this technology, Pacheco confirmed the investment was unrelated to Pia.

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