- ASX traded company 5G Networks (5GN) will be splashing millions in cash, including an annual $1.7 million contract, in purchasing data infrastructure company Australian Pacific Data Centres (APDC)
- The initial purchase is slated at $3.5 million, allowing 5GN to eat up 150 racks of servers, increasing its total infrastructure to over 600 racks
- This increase gives 30 per cent tenancy of Sydney CBD building ‘Pyrmont Data Centre’ to 5GN
- The infrastructure increase will allow the company to give new 5G opportunities to business in hardware distributors, cellular carriers and cloud service providers
Cellular and web service providers have a new opportunity on the market after ASX listed 5G Networks (5GN) sealed a company buyout to increase its services.
5GN will be splashing $3.5 million in cash, including an annual $1.7 million contract, to purchase data infrastructure company Australian Pacific Data Centres (APDC).
The acquisition gives 5GN a new major asset, through the access of over 150 racks. Racks are the physical cabinets holding data servers, allowing for the transfer of information for internet and cellular services.
The $3.5 million buyout is major for APDC, representing seven times the company’s latest earnings of $500,000.
“This is a valuable acquisition as typically facilities like APDC are not available; this purchase successfully executes on our infrastructure plans and we now have a clear understanding of what the next chapter looks like,” 5GN Managing Director Joe Demase said.
The purchase of the 150 server racks will increases 5GN’s total holding to over 600 racks through APDC’s Pyrmont Data Centre in Sydney’s CBD.
5GN management said this morning the acquisition will allow for a new wholesale strategy for the company, introducing the 5G capabilities and data plans to new hardware distributors, network carriers and cloud services.
5G data is the next step in cellular and web communication, a step up from predecessor 4G. 5G began its biggest rollout this year, with Telstra as a main provider of the capabilities across Australia.
5G data is understood to be up to 10 times faster than 4G and could potentially rival speeds of NBN.
“[Today’s purchase] is also welcome news for our customers, where 5GN can now offer dedicated and secure access from our connected data centres all the way through to Cloud and Managed Network services in Sydney, Melbourne and Adelaide,” Joe Demase added.
5GN’s presence at the Pyrmont Data Centre is currently 30 per cent, meaning the company has future opportunities to increase its tenancy in the Sydney building.
5GN management had particular focus this morning on stating the infrastructure expansion gives way to new business with Alibaba, Azure and AWS.
As well, the Sydney CBD positioning allows for opportunities of providing data needs across the Sydney area with ease.
“Importantly, our focus remains committed to profitable growth and fully optimising our infrastructure assets, as we continue to explore strategic acquisitions,” Joe concluded.
Shares in 5GN are trading 2.98 per cent higher today, for 86.5 cents apiece. The company’s market cap is currently valued at $53.43 million.