- Telecommunications company Vonex (VN8) has entered a binding term sheet with 2SG Wholesale to purchase its business operations
- Vonex will purchase 2SG for $2.66 million with a combination of shares and cash
- Following the completion of this purchase, co-founder of 2SG Wholesale Jason Gomersall will join the Vonex board as a Non-Executive Director
- Vonex has entered a trading halt, with shares trading 48 per cent in the green and trading for 14.5 cents apiece
Telecommunications company Vonex (VN8) has entered a binding term sheet with 2SG Wholesale to acquire its business operations.
2SG Wholesale is a telecommunications and data wholesaler based in Brisbane which provides Australian Managed Service Providers, ISPs and System Integrators with access to the latest in hardware and connectivity solutions from leading brands.
Its mobile broadband capacity provides Australian IPSs (internet service providers) the opportunity to sell a wireless broadband solution via the Optus 4G network.
Partnering with Australia’s premier carriers eases the delivery of the latest fixed-line, mobile connectivity and hardware solutions country-wide.
This acquisition is subject to Vonex completing legal and financial due diligence to its satisfaction which is likely to be completed before January 15, 2020.
The total cost is $2.66 million and will comprise of 21,578,947 shares at a price of $0.10 to be escrowed for 12 months after the issue and $500,000 in cash on the completion of the transaction.
This consideration brings 2SG Wholesale’s proprietary billing and provisioning systems, staff and equipment, contracts with major telecommunications companies, 140 wholesale customers, stock and no debt.
This purchase highlights the belief that the 2SG Wholesale vendors have in Vonex taking the combined businesses to the next level and generating attractive returns for all shareholders.
Vonex expects revenue on February 1, 2020, and following that 2SG Wholesale is expected to generate EBITDA in the first financial year after the acquisition of $750,000.
“The acquisition of 2SG Wholesale’s established operations will provide an instant expansion of the Company’s wholesale customer base, and will be highly earnings-accretive,” Vonex Managing Director Matt Fahey said.
“It will empower Vonex to add value to our wholesale and retail customers through better network access, new proprietary billing and provisioning systems and the latest telco products and services,” he added.
Following the completion of this proposed acquisition, co-founder of 2SG Wholesale Jason Gomersall will join the Vonex board as a Non-Executive Director.
Jason is a former Director of 2SG Wholesale and is the Founder, CEO and Managing Director of i-Seek Communications.
He has been at forefront of the telecommunications industry and the mobile phone market since being one of the foundation franchisees of the Optus World chain of retail stores in the 1990s.
“Vonex is a business I have watched with keen interest through an exciting period for the Australian telco industry with the rollout of the NBN,” Jason said.
“I view 2SG Wholesale and Vonex as highly complementary businesses and I look forward to helping to drive the growth of our combined group,” he concluded.
Vonex has entered a trading halt with shares up 48 per cent and trading for 14.5 cents apiece.