NetComm Wireless Limited (ASX: NTC), headquartered in Sydney, Australia, develops and commercialises fixed wireless broadband products for telecommunication carriers, system integrators, core network providers, government as well as enterprise clients globally.
On 15th April 2019, the communications technology innovator announced that the Australian Foreign Investment Review Board (FIRB) had provided approval to Casa Systems that the Treasurer of the Commonwealth of Australia had no objection to Casa acquiring full equity stakes in NetComm. However, the acquisition is still dependent on the approval of NetComm shareholders and Court approval.
Casa Systems, Inc. offers converged broadband solutions for next-generation centralised, distributed and virtualised architectures for cable broadband, fixed-line broadband and wireless networks. The company’s suite of solutions is commercially deployed in more than 70 countries via 450 Tier 1 and regional service providers across the globe.
A definitive agreement was signed between the two companies for the proposed transaction, whereby NetComm shareholders would receive a cash consideration of AUD 1.10 per NetComm ordinary share, which represents a significant premium of 49.8% to 1-month VWAP of AUD 0.734 per share and certainty of value with 100% cash consideration. Subsequently, NetComm would operate as a 100%-owned subsidiary of Casa Systems.
As per the scheme of arrangement, the offer values NetComm’s issued equity at ~AUD 161 million. The directors of the company unanimously recommended NetComm’s shareholders to vote in favour of the scheme, which is in their best interest and presents a compelling outcome for the customers, suppliers and staff as well.
Casa Systems’ Chairman and CEO, Jerry Guo reportedly announced that the strategic acquisition would immensely benefit Casa Systems and diversify their revenues, both geographically and by product channel. In addition, it would also widen the company’s customer reach and add fixed wireless products to their portfolio and help them to address the large 5G fixed wireless access market.
On 22nd February 2019, NetComm Wireless released its half-yearly results for the period ended 31st December 2018. The revenue from ordinary activities amounted to AUD 94.3 million, reflecting a 6.5% increase as compared to the prior corresponding period (PCP). The EBITDA was recorded at AUD 8.3 million, and the profit from ordinary activities after tax was AUD 2.3 million, both marking reductions of 9.6% and 37.2%, respectively as compared to PCP.
Besides, the company’s net assets were valued at AUD 86.69 million, including cash and cash equivalents of AUD 17.4 million with zero debt as of 31st December 2018. The operating activities generated net cash inflows of AUD 1.9 million mainly due to large receipts of AUD 113.6 million from customers. Meanwhile, the investing activities resulted in net cash outflows of AUD 11.9 million resulting from the acquisition of assets, property, plant and equipment.
With around 146.33 million outstanding shares, the NTC stock is trading at AUD 1.0857 up 0.184%
(As at 12:40 PM AEST, 16 April 2019).
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