Publicly-listed telecommunications, cloud and IT solutions provider, Over the Wire (ASX:OTW), has struck a deal to acquire fellow telco, VPN Solutions, for $15.6 million.
Established in 2002, VPN is based in New South Wales and is a provider of business grade telecommunications solutions to the Australian enterprises of varying sizes.
The company has approximately 150 business customers and has experienced high levels of customer retention and specialises in delivering complex managed network solutions.
It is anticipated that VPN will accelerate Over the Wire’s geographic expansion in New South Wales and South Australia.
Over the Wire told shareholders on 20 October it had entered into a binding agreement with the NSW-headquartered business to acquire all of its shares.
The deal consists of an upfront consideration of $15,615,000, comprising $14,834,250 in cash, plus $780,750 in Over the Wire shares at an issue price of $2.04.
Completion of the acquisition is expected to take place on 1 November 2017, and remains subject to a limited number of customary conditions precedent
The acquisition of VPN is expected to accelerate Over the Wire’s expansion into the New South Wales and South Australian markets.
The company noted that data networks represents over 90 per cent of VPN’s revenue and offers cross sell opportunities.
“We are very excited to be able to welcome VPN Solutions to the Over the Wire group,” Over the Wire’s managing director, Michael Omeros, said. “VPN Solutions is a high quality provider of managed networks with an impressive list of long term clients.
“VPN Solutions expedites our geographic expansion plans into New South Wales and South Australia and complements our expansion into Victoria following the acquisition of Telarus earlier this year,” he said.