Spirit Technology has acquired telecommunications equipment company Nexgen for $50 million, which the company called its largest acquisition to date.
Based in Sydney, Nexgen provides phone systems, printers, security cameras and cybersecurity services to small and medium enterprises. The company is also an NBN retail service provider and also resells other fibre providers.
Spirit said the acquisition brings in more than 5,500 new B2B customers and 100 new sales staff, and Nexgen is expected to generate $36 million in revenue.
The purchase price was raised partially through an unconditional placement to institutional and sophisticated investors, collecting $23.8 million.
“This acquisition more than doubles the Spirit portfolio of business services and assets in telco and is consistent with our strategy to bring in right-fit, right price, high-margin IT & Telco businesses,” Spirit managing director Sol Lukatsky said.
“Additionally, this transaction gives us a much deeper presence nationally and in particular in Sydney and Brisbane. Adding over 100 salespeople and 5,500 new customers will immediately have a material impact on our organic growth via an increased sales pipeline.”
Speaking on the acquisition, Nexgen co-managing directors Elie Ayoub and James Harb said, “As two leading companies within the telecommunications space, a combined Spirit and Nexgen will be committed to delivering superior end to end business solutions to our combined SMB customer base.
“Our two companies amalgamated will also sell a wider range of telecommunications products and IT services, offering greater choice and more opportunities for all our customers. We are both excited about the journey ahead and look forward to working with Sol and his team.”
The acquisition is set to finalise on 8 April 2021.