Spirit Telecom gears up for acquisitions with $9.2m capital raise

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Spirit Telecom gears up for acquisitions with $9.2m capital raise

Spirit Telecom has revealed two potential acquisitions on the cards as it caps off a $9.2 million capital raising and touts strong third-quarter results.

The ASX-listed telco and IT company has completed seven acquisitions over the past 12 months, allowing it to amass customers across hospitals, schools, aged care and other government institutions. 

The company also this month announced third-quarter 2020 revenues of $10.3 million, up 150 percent year-on-year.  

The telco said its merger and acquisition strategy would continue and even be supported by the current COVID-19 crisis, which the company described as presenting a unique opportunity to drive an accelerated M&A growth agenda given more favourable asset prices across telco and MSP companies.   

The company said little of the next acquisitions it plans to make, other than to note that both were in advanced due diligence and legal review.

Spirit managing director Sol Lukatsky said the past 12 months had seen the company shift from a fixed wireless provider into a “full integrated telco and IT services company”. 

“We are now a leader in bundling these products into one service and one bill. We have been effective in cross-selling, delivering growth in recurring revenue with a sticky customer base in SMB and essential industries,"  Lukatsky said.

"This puts us in a strong and defensive position, in an uncertain economic environment - with 74 percent of our revenues being contracted and recurring."

“With all four of our 2019 acquisitions now integrated and having proven the effectiveness of this approach in the Q3 2020 results, we have a unique opportunity now to acquire profitable businesses at lower multiples. We will continue to seek out opportunities that complement our strategy in terms of enabling expansion of our service offering and geographic footprint in both telco and IT/MSP services.”

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