It’s out with the old and in with the new at Freshtel Holdings (ASX:FRE), as the company reveals plans to shed its legacy Voice over Internet Protocol (VoIP) business in favour of the raft of IT and telco services provided by its acquisition target, Field Solutions Group (FSG).
Freshtel told shareholders in November last year that had struck deal to acquire 100 per cent of Field Solution Group’s issues capital, giving it total ownership of the Sydney-headquartered company. It intends to raise up to $4 million in a share offer to fund the acquisition.
Field Solutions Group has built up a broad range of technology service areas since its founding in 2012. Not only is it a telecommunications carrier and internet service provider, it also offers cloud services, hosting, software development, disaster recovery, security, and digital transformation and strategy services.
It offers specialised services based around Amazon Web Services (AWS), Google Cloud Platform, Microsoft Azure, and other public, private and hybrid cloud solutions.
The company’s customers include local government organisations, such as Hornsby Shire Council in Sydney, state government organisations, including Transport for NSW, and national organisations, such as Surf Life Saving Australia. It also has customers in the education sector, including the University of Sydney.
Freshtel told shareholders on 16 March that it plans to drop the VoIP business upon which it has been built, and instead transition to a full service telecommunications and technology services provider.
“Upon settlement of the acquisition, the company’s focus will shift to that of a telecommunications, technology and cloud computing company. It is the company’s intention, following reinstatement, to discontinue its current VoIP business and to focus solely on FSG’s business and operations going forward,” it said in a prospectus sent to shareholders.
Freshtel previously said the proposed acquisition of Field Solutions Group will constitute a change in the nature and scale of its activities, and would see it change its name to Field Solutions Holdings Limited upon completion.
While Freshtel said it plans to discontinue its existing VoIP business, it should be noted that when it first announced plans to acquire Field Solutions Group, it told shareholders that the IT services company also provided VoIP services among its offering portfolio.
Regardless, the acquisition is likely to see Freshtel’s post acquisition become a local channel partner for the likes of Microsoft, Red Hat, VMware and Oracle, all of which Field Solutions Group has existing partnerships with.
The acquisition remains subject to shareholder and regulatory approval.
Freshtel's share price stood at $0.002 at the time of writing.