- Comms Group (CCG) acquires ICT company, onPlatinum for a total of $12 million
- Upfront consideration of $10 million will be split across $8 million in cash and $2 million in CCG shares
- Deferred payment of the remaining $2 million will be split equally across cash and shares
- The company updated its FY22 EBITDA guidance to between $5 million and $5.5 million, which reflects five months trading from onPlatinum
- Shares are trading 4.76 per cent higher today at 11 cents each
Comms Group (CCG) will acquire ICT company onPlatinum for a total of $12 million.
Founded in 2012 and headquartered in the Gold Coast, onPlatinum has about 500 customers with an average revenue per customer of about $3,000 per month.
The company has four key divisions which include managed services, cloud services, data services, and voice services.
Upfront consideration of $10 million will be split across $8 million in cash and $2 million in CCG shares.
Deferred payment of the remaining $2 million will be split equally across cash and shares.
Completion of the transaction is expected on or around Monday.
If onPlatinum outperforms, the vendors will be entitled to an out-performance payment of up to $6 million, which will be paid in 80 per cent cash and 20 per cent CCG shares.
The company received approval from the Commonwealth Bank for a term loan facility of $10 million along with an increase to existing working capital facilities. This will be used to fund the acquisition in full.
After the acquisition, Comms Group expects annualised revenue to be over $50 million and annualised underlying EBITDA of over $7 million with the inclusion of expected synergies from the integration of onPlatinum.
The company has upgraded its FY22 EBITDA guidance to reflect the acquisition. For the full financial year, Comms Group expects an underlying EBITDA of between $5 million and $5.5 million, which includes five months of trading from onPlatinum.
CEO and Managing Director Peter McGrath said the acquisition will help the company expand into the Queensland market.
“We are extremely pleased to welcome onPlatinum’s CEO Shannon Overs and his team to Comms Group in both QLD and NSW,” he said.
“We are committed to driving sustained growth within the business and the acquisition of onPlatinum allows CommsGroup to further strengthen our position in the corporate mid-market by extending our product offerings and provides expansion into the strategically important QLD market.”
Shares were trading 4.76 per cent higher today at 11 cents each at 1.07 pm AEDT.