Superloop poised to acquire Symbio

The deal would be paid out in an equal split of cash and Superloop shares.

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Superloop is looking at another telco-related acquisition, with it poised to acquire Symbio.

In a statement released to the Australian Securities Exchange (ASX), Superloop said it made a non-binding indicative proposal to acquire all of the telco software vendor’s shares at $2.85 per share.

With 85,258,885 shares on offer, that comes to a total value of $243 million, rounded up. This total would be paid out in an equal split of cash and Superloop shares.

If Superloop is successful, this would continue its 12-month telco-related acquisition streak with it announcing its deals for all of MyRepublic’s 52,000 NBN subscribers at $250 per migrated subscriber in January this year and VostroNet for up to a total of $50 million in September last year.

In its ASX statement, Superloop’s board said it believed the transaction would create “a leading telecommunications company with a compelling breadth of services and strengthened customer proposition”.

“The Board of Superloop is confident that this combination has potential to create significant value for the shareholders of both Superloop and Symbio near-term through the realisation of significant cost synergies and into the future from an enhanced, sustainable growth outlook,” the statement said.

Specifically, the board continued, the deal would create a “larger and more complete” telco across data, voice and messages and deliver greater channel depth and deeper product capability across common customer channels.

Additionally, the deal is also expected to create a business “with an attractive balance of revenue and profit contributions, with an increased exposure to the wholesale and business segments, whilst also allowing even greater investment in accelerated growth in the consumer segment, among other benefits.

While a non-binding offer, the proposal is subject to a number of conditions including a unanimous Symbio board decision, with the pair entering into a four-week reciprocal exclusivity to further progress the proposal.

“The proposal that Superloop has made to potentially acquire Symbio represents an excellent proposition for all stakeholders and the combination of Superloop and Symbio would create a strong and attractive telecommunications business,” said Superloop CEO and managing director Paul Tyler.

“Superloop and Symbio currently have an excellent working relationship, with Symbio being one of Superloop’s largest wholesale clients, and the combination of the two businesses would be highly accretive.”

Symbio also released a statement to the ASX, claiming that there is “sufficient merit” in the proposed offer to at least enter into the exclusive period for mutual diligence.

Both companies also used their announcements to provide a guidance update for their FY23 results. Superloop said it expects its underlying earnings before interest tax, depreciation and amortisation (EBITDA) is likely to fall around $37 million, which puts it above the top end of its current guidance of $33 million to $36 million.