Telecommunications reseller Vonex has acquired Queensland wholesaler 2SG Wholesale for $2.66 million.
The deal, set to complete early next year, will give Vonex access to 2SG’s 140-strong fleet of wholesale customers, significantly increasing its current base of just 20.
Based in Brisbane, 2SG supplies hardware and connectivity solutions to Australian managed service providers, system integrators and internet service providers.
It currently has partnerships with Optus, NBN Co and i-Seek Communications and supplies products including mobile broadband, voice, modems, routers, in addition to NBN fixed-line services.
The deal is expected to be earnings accretive with 2SGWholesale expected to generate EBITDA of $750,000 in the first year after its acquisition.
According to Perth-based Vonex, which publicly listed on the Australian Securities Exchange in 2018, the deal will provide opportunities for upselling and cross-selling.
For example, as 2SGWholesale does not voice solutions, Vonex hoped to offer its Private Branch Exchange(PBX) connections to the wholesalers 140 customers.
Following the acquisition’s completion, 2SGWholesale founder and current i-Seek Communications CEO Jason Gomersall will join the Vonex board as a non-executive director.
He told ASX shareholders he sees the two businesses as “highly complementary”. “I look forward to helping to drive the growth of our combined group,” he said.
“I am excited to have the opportunity to join the Vonex board. I believe with my industry experience and expertise I can make a meaningful contribution during this exciting growth phase.”
Meanwhile, Vonex managing director Matt Fahey said the deal will “empower” Vonex to add value to its wholesale and retail customers through better network access, new proprietary billing and provisioning systems and the latest telco products and services.
“We look forward to growing more rapidly and profitably as we integrate 2SG Wholesale’s operations into Vonex’s fast-growing existing business,” he added.
Vonex went public on the ASX on 13 June 2018 nearly three years after its first aborted attempt at becoming a public company.
Vonex, which had expectations to raise $7 million in an initial public offering (IPO, instead raised $6 million.
It recently revealed it had signed up 72 channel partners during the 2019 financial year, which have helped grow its PBX to 29,000 registered users.