Spirit Telecom inks an agreement to acquire LinkOne Group, raises fresh capital for support

  • Apr 03, 2019 AEDT
  • Team Kalkine
Spirit Telecom inks an agreement to acquire LinkOne Group, raises fresh capital for support

On Wednesday, 3 April 2019, Spirit Telecom Limited announced the acquisition proposal to take over a complementary unlisted business, LinkOne.

In the release to the Australian Securities Exchange, Spirit Telecom Limited (ASX: ST1) announced that it has inked an agreement to acquire 100% of LinkOne at an upfront consideration of A$5.7 million, comprising both cash and scrip component.

LinkOne is a wholesale licensed telecommunications carrier operating a predominantly Fixed Wireless network. The takeover includes the acquisition of 100% interest in all the LinkOne Group of Companies including Anttel Communications Group Pty Ltd, LinkOne Pty Ltd, Ignite Broadband Pty Ltd and Wells Research Pty Ltd.

The acquisition of LinkOne is expected to enhance Spirit’s existing channel partner offering through expanding its presence in Brisbane and Sydney, together with providing a strong platform for ongoing expansion of the Spirit network. Moreover, the acquisition of LinkOne is expected to be highly earnings accretive which has the potential to add significant value to Spirit.

Spirit’s Managing Director, Geoff Neate said, “The acquisition of LinkOne is geographically complimentary in Melbourne and brings an instant accretive expansion into Sydney and Brisbane to Spirit. This is an exciting acquisition that has been over 6 months in the making and brings a growing business, managed by a smart team, into Spirit’s stable. CEO Todd Maunder will join the Spirit team, focused on network expansion and acquisition and will bring another level of thinking and innovation to Spirit.”

The 70% of consideration that makes to $4.0 million will reportedly be paid in cash while the remaining 30% or $1.7 million will reportedly be paid via the issue of approximately 13.1 million Spirit Telecom Shares at $0.13 to LinkOne shareholders. The consideration, however, is to be partially funded by the capital raising program of the company via Institutional placement and Share Purchase Plan (SPP).

Spirit has received strong support of institutional, professional and sophisticated investors to raise A$4.2 million, before costs, through the issue of 35 million ST1 shares at $0.12 per share via placement. In addition, the company has planned to offer all existing eligible investors the opportunity to subscribe for new shares through a Share Purchase Plan (SPP). The SPP will be capped at A$1.0 million with a maximum subscription of $15,000 per investors, subject to the record date of 2 April 2019.

The acquisition represents a multiple of circa 5x EV / EBITDA for the 12 months to 31 December 2018. This underscores the LinkOne’s business highlights of 570 customers, with business customers accounting for circa 90% of revenue, 44 PoPs, and network infrastructure that utilises complimentary hardware and co-located Australian data centres.

Spirit expects the LinkOne acquisition to close in late April 2019, subject to the satisfaction of customary closing conditions.

ST1 stock price plunged by 21.87% to last trade at $0.125 on 3 April 2019. Over the past 12 months, the stock has witnessed a negative price change of 36.0% including a decline of 5.88% in the past three months.

Also Read: Spirit Telecom Discloses About The Rejection Of Non-Binding Indicative Proposal


Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.

 

All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK