Superloop to purchase Exetel for AU$110 million | ZDNet

Superloop has announced to the ASX it has entered into an agreement to purchase fellow telco Exetel for AU$110 million.

Exetel will bring 110,000 customers that use 185,000 services and AU$150 million in revenue to Superloop. After the acquisition, Superloop is expecting to post revenue of AU$261 million, and have 155,000 customers using 230,000 services.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) after the purchase is expected to be AU$34 million, consisting of AU$18 million from Superloop, AU$11 million from Exetel, and AU$5 million in synergies expected to be realised within a year of the deal.

Superloop said the acquisition would pretty much double its workforce, with “no headcount synergies” flagged.

The deal is expected to be completed by July 2021, and will be funded by AU$100 million raised from 108 million new Superloop shares, with Exetel shareholders offered AU$10 million in Superloop shares priced at AU$1.01 per share. Superloop will also be refinancing its debt facilities for an extra AU$20 million that will go towards integration costs and working capital.

“Exetel services will be transferred onto the Superloop network without material capex spend, and the network will continue to have significant capacity to support future growth,” Superloop said.

“The acquisition of Exetel enables Superloop to accelerate utilisation of its infrastructure assets, through scaling its consumer and business customer segments. It delivers increased financial scale and market relevance.

“The transaction is fully aligned with Superloop’s growth strategy, continuing to provide super fast, easy & reliable connectivity to now 3x more homes & businesses.”

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In prior years, Exetel has seen its revenue shift from AU$127 million in 2019, to AU$156 million in 2020, and AU$150 million for the 2021 fiscal year. Over the same years, EBTIDA increased from a AU$0.1 million loss, to AU$6.4 million in 2020, and AU$11 million in 2021; while net profit moved from AU$0.5 million in the hole, to AU$3.6 million, and AU$6.7 million respectively.

Breaking down Exetel’s customer base, Superloop said it had 86% of its services used by consumers which provided 56% of the revenue total. The remainder consisted of business customers. By revenue line, 45% related to NBN connections, 28% was labelled as data, 13% was fibre connectivity, 6% for VOIP services, 4% for mobile, and 4% filed as other.

For its first-half results announced in February, Superloop reported a 4.8% increase in revenue to AU$53 million and an almost doubling of EBITDA to AU$8.15 million. In net terms, the company posted another loss, this time closing the loss by 11.7% to AU$18.9 million.

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