- Network provider Superloop (SLC) to acquire internet services company Exetel for $110 million
- Superloop says the buy will be financially accretive and will expand its customer base to Exetel’s portfolio of over 110,000 customers
- To fund the purchase, Superloop will raise $100 million through a placement and entitlement offer which, altogether will issue 107.5 million new shares
- Shares will be priced at 93 cents — representing a 10.3 per cent discount to the last closing price of $1.04
- The company expects the acquisition to finalise in late July
- Superloop last traded at $1.04 on Friday, June 4
Superloop (SLC) is set to acquire internet services provider (ISP) Exetel for $110 million.
The acquisition
Founded in 2001, Exetel has become a leading Australian private and independent ISPs with over 110,000 residential and business customers.
Superloop, also an independent provider of connectivity services, said the acquisition will be materially accretive.
For example, Exetel expects to generate about $150 million for the 2021 financial year as well as an earnings before interest, tax, depreciation and amortisation (EBITDA) of $11 million.
“The acquisition of Exetel – Australia’s largest private ISP – adds significant scale to grow profitable share of our three customer segments,” Superloop CEO Paul Tyler said.
“Integration of Exetel into Superloop’s existing networks brings super fast, super easy and super reliable connectivity to three times more homes and businesses.”
Equity raise
To fund the acquisition price, Superloop plans to raise $100 million through a placement and entitlement offer.
Additionally, the $110 million enterprise value of the buy includes a vendor placement of $10 million in approximately 9.9 million Superloop shares which will be issued to the vendors at $1.01 per share.
The company hopes to raise about $49 million through the placement under which it will issue 52.6 million shares to institutional investors at a price of 93 cents. The issue price marks a 10.6 per cent discount to the last closing price of $1.04 on Friday, June 4.
The other $51 million will be raised through the pro-rata accelerated non-renounceable entitlement offer which will be split into a retail and institutional component.
Across both components, 54.9 million shares will be issued at the same price as the placement. Eligible shareholders may subscribe for one new share for every 6.67 existing Superloop shares held on Thursday, June 10.
Eligible retail shareholders who take up their full entitlement may also participate in a top-up facility by applying for more company shares at the offer price on top of their entitlement.
The placement and institutional entitlement offer will be completed on Wednesday, June 9 with shares expected to settle on Thursday, June 17.
The retail component will be open from Wednesday, June 16 until Tuesday, June 29, 2021.
Superloop will also fund the acquisition and associated costs with the transaction through refinanced debt facilities from the existing $61.7 million to $92.2 million. The increased facility will also benefit its balance sheet and working capital.
The acquisition is expected to be completed in late July.
Further, Superloop has confirmed an EBITDA guidance of between $18 million and $18.5 million for FY21.
Superloop last traded at $1.04 on Friday, June 4.