L-R: Phillip Britt (Aussie Broadband), Michael Omeros (Over the Wire)
Aussie Broadband has wrapped up its first company acquisition in the form of Brisbane-based telecommunications and IT solutions provider Over the Wire for $344 million.
Under the deal, Over the Wire will delist from the Australian Securities Exchange (ASX) on 16 March at close of business, while Aussie Broadband will pick up around 16,000 business, enterprise, government and wholesale customers, as well expand its staff to more than 1,000 employees.
The deal is also expected to generate annual cost synergies from $8 million to $11 million within three years.
“This acquisition gives us the chance to expand our product and skill capability and further accelerate our growth in the enterprise/wholesale markets in Australia,” said Aussie Broadband co-founder and managing director Phillip Britt.
“We believe that together we will be stronger and we can bring something extraordinary to the telco industry.”
Britt said Over the Wire is a great fit for the publicly listed company, with voice a “key strategic piece”, particularly as the acquired company is a tier 1 voice provider.
"The need for high-quality voice capabilities is something that has been rapidly growing, particularly in the wholesale space,” he said.
“We plan to turn our Carbon business platform into a full service offering for all business and enterprise communication and IT needs, so we see the voice element coming into the platform in a big way.”
Also significant to Aussie Broadband is Over the Wire’s cloud and security business, as Britt said he is seeing more demand for those type of services.
“One of the key benefits with Over the Wire’s cloud offering is that they own all the infrastructure, either in their own data centre in Brisbane or in third party data centres nationally,” he said.
“Primarily, the cloud offering is targeted towards large government and large businesses and this integration is a good opportunity to further expand into these areas.”
In addition, Over the Wire’s managing director and group CEO, Michael Omeros, is set to join Aussie Broadband’s board of directors, while CTO John Reisinger will continue in his current role and retire from the board.
In September last year, Aussie Broadband launched a $114 million share placement, with part of this earmarked for mergers and acquisitions (M&A).
A month later, discussions surrounding Over the Wire’s acquisition were taking place and in December the price point of $344 million was made public.
Over the Wire is no stranger to acquisitions, previously purchasing Melbourne-based managed service provider Telarus and fellow telco VPN Solutions.
In the last 18 months, it also spent spent $63 million on the acquisitions of J2, which included the brands Fonebox and Zintel, and Digital Sense, while also posting revenue of $112.7 million.
