Superloop to buy out Exetel for $110 million

By on
Superloop to buy out Exetel for $110 million
Paul Tyler (Superloop)

Superloop will acquire Exetel, Australia’s largest independent ISP, for a total of $110 million, comprising $100 million cash and $10 million in Superloop shares.

In Superloop's ASX announcement, the company said it was raising the cash needed for the acquisition partially through debt, and partially through the sale of equity.

The acquisition is expected to be completed in late July, should all conditions be met. All Exetel employees will transfer to Superloop and both brand names will be kept in use.

"This brings together the high capacity infrastructure that Superloop has built over the past six years, to meet continuing and growing demand for fast, reliable Internet services that are easy and quick to access. Exetel's 110,000+ business and consumer end-users will be able to take advantage of that infrastructure," said Superloop chief executive Paul Tyler.

"This acquisition is part of our strategy of accelerating utilisation of Superloop's APAC network that we have built across the main metropolitan centres here in Australia, and in Singapore and Hong Kong. It's the latest example of our approach to drive growth and scale across the three distinct customer segments of consumers, business and wholesale.

"The acquisition accelerates returns to Superloop investors in increased revenues, EBITDA and user numbers. It creates scale, giving Superloop the market presence to meet the demand from consumer, business and wholesale customers for high-speed services. And it gives users the certainty of service, and the great user experiences they increasingly demand and expect."

There are estimated annualised cost synergies of $5 million, the majority of which is made up of being able to transfer Exetel’s wholesale spending on NBN infrastructure onto the Superloop network, according to an investor presentation on the deal.

"The migration of Exetel's users to the Superloop backhaul network also strengthens our wholesale offering by increasing its scale," said Tyler.

"It adds critical mass to our wholesale business, will strengthen our backhaul network, and allows us to accelerate the automation of NBN connectivity and management using the Superloop Connect platform."

The presentation also outlines that Superloop will gain access to new products, including VoIP and mobile bundling, as the brands cross-sell offerings to their customers.

Exetel chief executive Richard Purdy will remain at the helm for a transition period, reporting to Tyler.

“The combination of our business with Superloop will create a player of genuine scale, able to take the challenge to the large incumbent operators which has been part of the Exetel DNA from the outset," Purdy said.

“Importantly, it also creates increased opportunities for our people by becoming part of a larger, more diversified business, and enables our customers to gain access to a superior network. I have been impressed by the strong cultural alignment between our companies and the exciting prospects for the Exetel brand to continue to develop.”

Exetel’s forecast $150 million in revenue will give Superloop an estimated 135 percent boost in revenue for the coming year. It will also more than double its customer base from 45,000 to 155,000+ and increase the number of services it provides to businesses and consumers by 400 percent.

Got a news tip for our journalists? Share it with us anonymously here.
Copyright © CRN Australia. All rights reserved.
Tags:

Most Read Articles

Log In

Email:
Password:
  |  Forgot your password?