Sol Lukatsky (Spirit)
Spirit Technology Solutions is to acquire telecommunications provider Nexgen in what it claims is its largest acquisition to date.
The move will see Spirit double its B2B customer base to over 10,500 and add an extra $36 million to its revenue banks, the publicly listed company claimed.
Comprising of the Nexgen and Business Telecom brands, the acquisition brings over 5,000 new B2B clients and 100 new salespeople into Spirit.
The two business however will continue to operate under their own brands, but the salespeople will cross-sell Spirit’s internet, cloud, voice, mobiles and cyber security services in addition to selling existing Nexgen products.
This includes Nexgen’s business and internet plans — both those on the National Broadband Network (NBN) and high-speed fibre — as well as voice equipment and software technologies and vendor-independent mobile plans.
Furthermore, ARN understands that all acquired employees will make the transition following the acquisition.
According to a statement published on the Australian Securities Exchange (ASX), the completion payment is capped at $50 million, which includes a deferred component of $10 million and excludes any agreed milestone incentives available based on performance targets for FY22 and FY23.
Sol Lukatsky, managing director of Spirit, said the acquisition was consistent with its strategy to bring in right-fit, right price, high-margin IT and telecommunications businesses.
“This transaction gives us a much deeper presence nationally and in particular in Sydney and Brisbane. Adding over 100 salespeople and 5,500 news customers will immediately have a material impact on our organic growth via an increased sales pipeline,” he said.
The acquisition is expected to be completed around 8 April.
In addition to the acquisition announcement, Spirit also conducted an unconditional placement to institutional and sophisticated investors, raising $23.8 million, and increased its debt facility with CBA by $10 million, bringing it up to $25 million, to support the acquisition.
These announcements come weeks after its move to divest its consumer infrastructure assets, which it said was in line with its shift to focus on the business market.
The publicly listed telco-turned-IT services provider also bounced back into the black in its half year results for financial FY21 with revenue of $44 million for the period ended 31 December 2020.
