Michael Omeros (OTW)
Aussie Broadband looks set to fork out at least $344 million for cloud, IT and telco services provider Over the Wire in one of the biggest telco deals of the year.
If approved by Over the Wire's shareholders, the deal will see Aussie Broadband co-founder and CTO John Reisinger step down from his board position and be replaced by the former's CEO Michael Omeros.
The terms of the deal will see the publicly listed Aussie Broadband pay either $5.75 per share for Over the Wire or $4.80 per share in a mix of cash and stock.
The implied offer value of $5.75 per Over the Wire share represents a total equity value of $344 million and an enterprise value of $390.4 million.
Shareholders will now how have to vote on the terms of the deal, whether full cash, a mix of cash and shares or 100 per cent scrip consideration equating to 1.5 million Aussie Broad shares for each Over the Wire share.
Founded in 2005, Over the Wire has grown through acquisitions over the past 16 years. Having listed on the Australian Securities Exchange in 2015, it went on to acquire Melbourne-based managed service provider Telarus and fellow telco VPN Solutions.
In the last financial year, it spent $63 million on two acquisitions: J2, which included the brands Fonebox and Zintel, and Digital Sense, while also posting revenue of $112.7 million.
The year also saw Over the Wire CEO Scott Smith exit the company after just 17 months with Omeros taking over to sit alongside his managing director role.
“This is an exciting next step in the Over the Wire journey, and I am very proud of what the Over the Wire team has built over the years which is reflected in this compelling proposal for the company," Omeros said.
Aussie Broadband's acquisition move comes shortly after it launched a $114 million share placement in an effort to secure merger and acquisitions (M&A), among other growth opportunities.
The placement, which consisted of 28.5 million ordinary shares at $4 per share, was also planned to be used for new business product and technology development as well as potentially additional fibre and network construction.
Shortly after, following media reports, Aussie Broadband confirmed it was in exclusive talks to acquire Over the Wire.
"We believe Over the Wire is a great match to complement our current range of services," said Aussie Broadband co-founder Phil Britt. "It’s a high-quality business in a large and growing segment of the Australian telecommunications market.
“After several weeks of getting to know the company’s senior team, we very much look forward to welcoming Over the Wire to the Aussie Broadband family.”
