5G Networks forks out $6M for Melbourne’s APTel

5G Networks forks out $6M for Melbourne’s APTel

The acquisition deal is for a purchase price of $6 million and a capital raising effort of approximately $3.5 million

Credit: Dreamstime

Melbourne-based high-speed broadband and cloud infrastructure provider, 5G Networks (ASX:5GN), has acquired fellow Australian telco provider, Asia Pacific Telecommunications Group (APTel).

The acquisition deal is for a purchase price of $6 million and a capital raising effort of approximately $3.5 million.

Based in Melbourne, APTel was originally developed as an internal business division providing network solutions and telecommunications services to the Deague Group and Deague developments. Today, it operates as a voice, data and cloud communications service provider and aggregator.

APTel collectively generated revenue of $6.3m in the 2017 financial year, according to 5G Networks.

5G Networks, which is publicly-listed on the Australian Securities Exchange (ASX), told its shareholders on 12 March that APTel has over 20 years’ history, and services over 800 mid-market corporate clients, hotel groups and commercial offices throughout Australia.

The company said that APTel has the potential to enhance the range of services it can bring to its target mid-market customer group.

“The acquisition of APTel is a significant illustration of the strategy that we outlined in our IPO prospectus,” 5G Networks managing director, Joe Demase, said. “Immediately it increases our revenue and EBITDA [earnings before interest, tax, depreciation and amortisation] levels to give us scale and cashflow and access to a substantial new customer base that we can use to leverage our core offerings.

“The integration of the APTel service suite with our own offering delivers a powerful business solution that can meet the modern demands of the mid-tier business market for broadband and cloud services,” he said.

According to Demase, 5G Networks’ immediate focus following the acquisition will be on the integration of the APTel business and personnel, while engaging the APTel customer-base with the services the combined APTel 5G operation will deliver.

An additional agreement has been struck between the two companies that will see 5G Networks partner with the Deague Group for current and future Deague Group property developments, including IT infrastructure and network access.

“5G will provide all IT services for the Deague Property group under a long term service agreement. Additionally, 5G will have roof top access to all existing and new Deague Group properties across Australia which will accelerate 5G’s wireless network rollout,” the company told shareholders.

5G Networks went public in late November last year, after raising $4 million in its initial public offering (IPO), in a move that was set to see the telco player target the local small to medium-sized enterprise (SME) market.

The company was admitted to the official list of the Australian Securities Exchange (ASX) on 15 November, with official quotation of its publicly-traded securities on the exchange set to kick off at 11AM on 17 November.

The move came after 5G Networks entered into an agreement in July to acquire 100 per cent of cloud and IT services provider, Enspire Australia, in a deal worth $1.8 million in cash and shares.

The acquisition of the IT services provider was contingent on the successful IPO of 5G Networks and is set to reach completion within days of the public listing wrapping up.

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Tags aptel5G NetworksAsia Pacific Telecommunications Group

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