Publicly listed fibre network operator Superloop has struck a deal to acquire internet service provider (ISP) Exetel for a total of $110 million.
The deal comprises $100 million cash and $10 million in Superloop shares and will give the company access to Exetel's 110,000 residential and business customers.
Exetel provides services across National Broadband Network (NBN), fibre broadband, mobile and business telco services and is forecasted to generate revenue of around $150 million and pre-tax earnings (EBITDA) of $11 million.
"The acquisition of Exetel – Australia's largest private ISP – adds significant scale to grow profitable share of our three customer segments," said Paul Tyler, Superloop CEO.
"Integration of Exetel into Superloop's existing networks brings super fast, super easy and super reliable connectivity to three-times more homes and businesses."
Once the completes, Exetel will become part of Superloop, thereby becoming part of the publicly-traded company.
Both brands will remain in place, with Exetel customers continuing to be supported by its own team.
As a result of the acquisition, the Bevan Slattery-founded network infrastructure provider has tightened its projected pre-tax earnings for this financial year to between $18 million to $18.5 million.
To fund the acquisition, Superloop is looking to raise $100 million in equity with a share placement and entitlement offer.
Exetel was founded by the now-deceased John Linton and is owned by his family. It is run by Richard Purdy, another of Linton’s extended family.
It was the first partner to roll out Optus Wholesale home wireless broadband solution and has offered Telstra Ethernet Access to its corporate customers since 2017.
The contract has an expected value in excess of $25 million and was Superloop’s largest single contract win to date, the company told shareholders.
Last year, Superloop was forced to cull $3.3 million in headcount costs via redundancies of more than 30 workers.
The reduction – valued at 10.7 per cent in permanent costs – came as the company saw significant reductions in its internet service business for student accommodation and the hospitality sector amid a last year's nationwide lockdown.
At the same time, its then CEO Drew Kelton announced he was stepping down from the company with Tyler, the former NBN Co enterprise lead, officially taking over in October.