Inabox will pay nearly $10 million for Anettel –just $500,000 in cash and 6,153,846 new Inabox shares. The Inabox shares will be issued to Anittel shareholders in proportion to their holding in Anittel.
A further payment of up to $1.5 million in cash may also be payable subject to the performance of Anittel until then end of June 2015. In addition, Inabox will assume approximately $4.6 million of lease liabilities relating to Anittel’s Cisco HCS platform.
No mention was made of any staffing cuts, though the announcement did refer to the transfer of only “the majority of existing employees.”
At Inabox’s closing share price on 3 November of $1.28, the purchase price would be $9.88 million. This equates to 0.39 cents per Anittel share, which i represents a 30% premium over Anittel’s closing share price of 0.30 cents on 3 November.
The transaction is subject to the approval of the shareholders of Inabox. This approval will be sought at an EGM to be held in late December 2014. The transaction is also subject to other conditions precedent including the approval of the shareholders of Anittel, to be sought at its AGM also in late December 2014.
There is unlikely to a be a problem from either side. Anittel is majority owned by well known Australian IT entrepreneur Peter Kazacos, Anittel’s chairman and CEO, who will consult to Inabox on its integration and future growth strategies. Kazacos will also become a significant shareholder in Inabox with an interest of approximately 10.6% of its expanded capital.
Inabox Group CEO Damian Kay says the acquisition of Anittel’s business will provide it with a number of important benefits, including:
- Enhanced sales, service and technical capabilities – with over 200 staff and a national footprint the combined group will be able to offer its clients end-to-end IT, cloud and communications solutions in 14 locations across metropolitan and regional Australia.
- Complementary products, services and capabilities – the combination will provide opportunities for cross-sell and up-sell through Inabox’s existing 300+ wholesale partners and Anittel’s 1,000 plus clients, which include SMEs, corporations, not-for-profit organisations and Government departments.
- New platform - Inabox is acquiring a fully deployed, enterprise grade Cisco Hosted Collaboration Solution (HCS). Anittel has made a multi-million dollar investment building this cloud based communications platform. In FY14 alone, the majority of Anittel’s $4.3 million investment in telecommunications went to support the HCS offering. With over 8,000 endpoints deployed for the Tasmanian Government, the HCS platform is expected to create significant opportunities for further growth of Inabox’s annuity revenue streams.
- Scale and financial strength - the historical (FY14) combined revenues of Inabox and the Anittel businesses was approximately $83 million ($46.9 million and $36.1 million for the Inabox and Anittel businesses respectively). This will provide the combined group with the scale and financial strength to accelerate its growth.
Over the last year, Anittel has restructured its business significantly, reducing costs and refocusing on its core IT services, HCS and cloud businesses. Inabox and Anittel have also identified significant savings in back office and corporate overheads. The majority of these savings will be implemented prior to completion.
Post acquisition, the acquired businesses will continue to operate under the Anittel brand with substantially the same management. Inabox will continue to invest in the HCS platform and focus on maximising the significant cross-selling and up-selling opportunities between the Inabox and Anittel businesses.
Damian Kay said: “Peter and his team have built a significant business with broad geographic coverage. Anittel’s customer focus, service execution and technical capability are exceptional and being able to broaden our revenue base into new products, services, customer segments and regions through a trusted advisor delivery model is very attractive.”
“Our customers will also benefit from a broader range of services, backed by the combined strength of two great Australian companies,” said Kazacos. “Unlocking the value of what we have built over the last six years represents a huge opportunity for customers, staff and shareholders of the combined group.”