How Will SKS Technologies’ $15M Delta Elcom Deal Reshape NSW’s Data Centre Market?
SKS Technologies announces plans to acquire Sydney-based Delta Elcom, aiming to strengthen its foothold in Australia's largest data centre market. The deal, valued up to $15 million, combines complementary expertise to accelerate growth in New South Wales.
- SKS to acquire 100% of Delta Elcom for up to $15 million
- Acquisition targets expansion in NSW’s dominant data centre market
- Deal includes cash, shares, and earnout payments tied to 2026 performance
- Delta Elcom’s leadership to integrate with SKS, maintaining operational continuity
- Completion expected by mid-January 2026, pending legal formalities
Strategic Expansion into NSW Data Centre Market
SKS Technologies Group Limited (ASX, SKS) has revealed its intention to acquire Delta Elcom, a Sydney-based specialist in data centre infrastructure and electrical solutions. This move is designed to accelerate SKS’s growth in New South Wales, the largest and most competitive data centre market in Australia. The acquisition aligns with SKS’s broader strategy to deepen its presence in key regional markets by leveraging complementary capabilities and client relationships.
Deal Structure and Financial Considerations
The transaction values Delta Elcom at up to $15 million, comprising an $11.75 million cash payment, $2 million in SKS Technologies shares, and an earnout of up to $1.25 million based on 2026 performance. The cash component will be funded from SKS’s substantial cash reserves, which stood at $42.5 million as of October 2025. The share consideration will be subject to escrow arrangements to ensure alignment of interests post-acquisition.
Operational Integration and Leadership Continuity
Delta Elcom’s Managing Director, Mark Brame, is expected to transition into the role of SKS’s New South Wales General Manager, retaining his existing team. This continuity is intended to preserve Delta Elcom’s operational strengths and client relationships while blending with SKS’s NSW workforce to create a cohesive unit. The integration process is slated to begin following the anticipated completion date of 12 January 2026, subject to final legal approvals.
Market Implications and Growth Prospects
SKS’s CEO, Matthew Jinks, highlighted the significant long-term growth prospects in the NSW data centre sector, driven by ongoing digital infrastructure expansion and hyperscale investment. By combining Delta Elcom’s specialist delivery capabilities with SKS’s national scale and technical expertise, the group aims to accelerate market penetration and earnings growth. This acquisition signals SKS’s commitment to strengthening its competitive position in a market critical to Australia’s digital economy.
Next Steps and Outlook
While the transaction is agreed in principle, it remains subject to legal formalities before becoming binding. Investors will be watching closely for the formal completion announcement and subsequent integration updates. The success of this acquisition will likely hinge on the seamless blending of teams and the ability to capitalize on the expanding opportunities within the NSW data centre landscape.
Bottom Line?
SKS’s acquisition of Delta Elcom sets the stage for accelerated growth in Australia’s largest data centre market, but execution risks remain as integration unfolds.
Questions in the middle?
- How will SKS manage integration challenges between the two teams in NSW?
- What impact will the earnout structure have on Delta Elcom’s 2026 performance incentives?
- Could this acquisition trigger further consolidation in the Australian data centre infrastructure sector?
