The Telstra Group Ltd (ASX: TLS) share price is on the move on Friday.
In morning trade, the telco giant's shares have edged higher to $3.95.
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Why is the Telstra share price rising?
Today's gain could have been driven by reports claiming that the company is about to make a major acquisition.
According to the AFR, Telstra is preparing to make a binding offer for Melbourne-based cloud transformation and consulting company, Versent.
Telstra is understood to have made the move after being outbid by French defence behemoth Thales for Tesserent Ltd (ASX: TNT).
The report suggests that Telstra would be paying upwards of $400 million to acquire Versent.
What would Telstra be acquiring?
Versent describes itself as a leading technology consultancy. It designs, builds and operates cloud-native applications, data streams, platforms, and services from offices across Australia, Singapore, and the United States.
It currently works with 40% of the companies listed on the ASX 100 index. This includes Transurban Group (ASX: TCL), Westpac Banking Corp (ASX: WBC), and Woodside Energy Group Ltd (ASX: WDS).
The AFR reports that the company, which was founded by former National Australia Bank Ltd (ASX: NAB) employees, has been growing at a compound annual growth rate of 35% over the last five years.
This leaves Versent's revenue sitting at $150 million currently, with management noting a clear pathway to $300 million in revenue over the next three years. This is expected to be driven by market share gains and an expansion into South-East Asia.
Telstra response
Telstra has responded to the report this morning and has confirmed that it is interested in acquiring Versent. However, it has suggested the $400 million price tag may be off the mark.
It commented:
Telstra confirms it is participating in the process. References to the value of the offer are speculative. There is no certainty a transaction involving Telstra will eventuate, should a transaction be finalised Telstra will update the market accordingly.
