Vocus Communications (ASX:VOC) has officially completed the acquisition of Nextgen Networks, the North West Cable System (NWCS) development project, and the Australia Singapore Cable (ASC) development project from the Nextgen Group.
The acquisition cost Vocus a total upfront consideration of $806.7 million, subject to customary adjustments, and deferred consideration of up to $54 million.
This follows the green light to go ahead with the deal by the Australian Competition and Consumer Commission (ACCC), which said it will not oppose a move by Vocus Communications to acquire Nextgen Networks.
The move brings to completion the binding agreement that Vocus entered into in June to purchase Nextgen Networks in a deal which will add 17,000 kilometres of fibre cable to the company’s infrastructure portfolio.
Vocus CEO, Geoff Horth, said Nextgen Networks delivers Vocus one of Australia’s largest fibre backhaul networks, complementing Vocus’ existing fibre infrastructure.
“The acquisition will connect Vocus’ metropolitan fibre infrastructure to Nextgen Networks’ inter-capital fibre network, creating a national network connecting capital cities, regional and remote areas, owned and managed by the Vocus team,” he said.
As for the acquisition of the NWCS development project, it will enable Vocus to increase penetration of the mining and offshore oil and gas sectors, according to Horth. The cable is now operational and is underwritten by foundation partners on long-term contracts.
The ASC development project will see Vocus now own the whole project and advance the opportunity in its own right. Previously, a non-binding term sheet was inked in November 2015 to form a 50-50 joint venture for Vocus and Nextgen Group to construct and operate the ASC.
“We will ensure that we move quickly to integrate the business within the Vocus platform and ensure a seamless transition for Nextgen’s customers,” Vocus chairman, David Spence, said.
Vocus also recently lost its founder, James Spenceley, and former Amcom chairman, Tony Grist, from the board of directors.
On October 12, the company told shareholders that Spenceley, an executive director, and Grist, a non-executive director, had resigned from the company’s board following a special meeting held in Melbourne the day before.
The resignations followed a “difference of opinion” between the departing directors and majority of the board about the future leadership of the company. Its chief financial officer, Rick Correll, resigned soon after.
At the time of publication, Vocus’ shares were trading at $5.72, down by $0.17 (2.89 per cent) from the previous close.