Telco Uniti Group is set to acquire Melbourne-based phonewords provider 1300 Australia for $78 million.
Phonewords are alphanumeric translations of a phone number, which includes vanity numbers like 1300 FLIGHT (1300 354448), for example.
1300 Australia is Telstra’s official phonewords partner, and was once majority owned by Telstra as Telstra PhoneWords. The company owns 4500 phonewords and priority numbers (1300, 1800 and 13) currently licensed to businesses and another 7000 available to be lisenced.
In an ASX announcement (pdf), Uniti said 1300 Australia will become part of its Specialty Services pillar and will be complementary to the 1300/1800/13 voice services, call tracking and SMS business of recent acquisitions Fone Dynamics and Call Dynamics.
“The acquisition of 1300 Australia is a significant event for Uniti Group, delivering material, well defended earnings and remarkably strong free cash flow,” Uniti chairman Graeme Barclay said.
To finance the acquisition, Uniti is looking to raise $85 million in a non-renounceable entitlement offer. The offer started yesterday, 3 December 2019, and is expected to complete towards the end of the year.
Barclay added the acquisition is Uniti’s largest to date in terms of incremental earnings contribution, providing “infrastructure-like returns” to the Specialty Services pillar.
1300 Australia is expected to boost Uniti’s revenue to around $81 million and $32 million in EBITDA. In FY19, the company had EBITDA of $10.9 million.