Australian fixed wireless operator Big Air announced today it has offered to buy Western Australian service provider Intelligent IP Communications (IIPC) for $10 million in cash and scrip.
The deal has the potential to be worth a further $10 million contingent on operations hitting performance targets in the first few years.
Big Air chairman Paul Tyler said in a statement the company was impressed by IIPC’s unified communications platform and managed services offering.
He also noted IIPC’s strong customer base in the resources sector where it provides microwave backhaul and fibre distribution supporting IPTV, internet and telephony to remote camps.
Big Air views this capability as complimentary to its university accommodation division Big Air Community Broadband (BCB), which the company says is the biggest provider of managed internet services to Australian university colleges, with around 30,000 students connected.
Buying IIPC gives BigAir an additional 1900 km of microwave coverage in WA spanning Geraldton to Albany as well as some 550 customers across mining, retail, tourism and manufacturing.
For the 2013 fiscal year, IIPC generated revenues of $9.2 million and EBITDA of $1.4 million. Following a period of integration IIPC is expected to contribute over $3 million in annualised EBITDA with that figure expected to rise thanks to cost synergies and additional sales through Big Air’s existing customer base.
IIPC will operate as a wholly-owned subsidiary of BigAir with co-founders Doug Childress (CEO) and Jonathan Matthews (sales director) each staying on in caretaker mode for two years.