7th Dec 2012. Vocus Communications Limited (ASX: VOC) today announced it has entered into a binding agreement to acquire Ipera Communications Pty. Ltd, the leading Fibre and Data Centre operator in the Newcastle region of NSW, Australia.
The purchase price of the business is A$9.8m with 50% of the purchase price subject to a 12 month earn out. The initial consideration of A$4.9 million will be funded 75% from existing cash, with the remaining 25% paid in Vocus shares.
Once the transaction completes and after transaction costs, there is expected to be minimal contribution to FY13 earnings however the business is expected to contribute EBITDA of between $2.3m and $2.5m in its first full financial year (FY14).
The acquisition will see Vocus expand its fibre network with 55km of fibre in Newcastle, to add to the 235km of fibre the company has across the country, of which it currently utilises less than 5%. The company will also add 81 on-net fibre buildings to the 166 buildings the company already has.
Ipera was an early leader in fibre based services and has been in operation since 2000. Over that time it has built one of the most extensive Dark Fibre networks in the Newcastle area and more recently added Data Centres as a complementary product to that fibre network. The company services the Newcastle requirements of a number of other telecommunications carriers as well as boasting some of Newcastle’s largest corporates such as NIB Health Funds, Hunter Water Corporation, Port Waratah Coal and Macquarie Generation.
Continuing the strategy of combining Data Centres and Fibre, the acquisition adds two geographically diverse data centres in Newcastle, one of the fastest growing economic regions in Australia and the 7th largest population centre. Ipera’s data centres are located in Newcastle West and Mayfield West, in the New South Wales Hunter Valley.
James Spenceley, CEO of Vocus said “With a mix of fibre and data centres, the acquisition of Ipera is very complementary. Ipera’s combination of large corporate and wholesale customers fits very nicely with the existing business. Vocus will now be able to service the national requirements of Newcastle based businesses as well as expand the services Ipera already successfully provides locally in Newcastle.”
Chris Deere founder and MD of Ipera will take on an initial role managing the Newcastle business for the combined entity and later accept broader responsibilities within the group.
“Having been a customer of Vocus since the beginning, I know the vision and culture of our companies are in perfect alignment and this transaction will now allow us to compete for the national business of our Newcastle clients as well as to continue to capture local market share in Newcastle. This acquisition has significant benefits to customers of both organisations.” said Chris Deere.
(ASX:VOC) Vocus Communications is an ASX listed leading telecommunications provider of Data Centre, Dark Fibre, Voice and International Internet connectivity across Australia, NZ, Singapore, Hong Kong and the US. The company provides high performance, high availability, and highly scalable communications solutions, which allow service providers to quickly and easily deploy new services for their own customer base.
Vocus has a history of acquiring datacentre companies to expand its footprint, and in the last two years, it has picked up E3’s Sydney and Melbourne datacentres and Perth IX. In September, the company announced that it would quadruple its subsea cable capacity with Southern Cross, and Spencely stating at the time that Vocus was close to reaching its initial capacity.