Queensland cloud and VoIP provider, Neural Networks Data Services, is set to be snapped up by Australian-listed telecommunications products and services wholesaler, Inabox Group, for AU$350,000.
Inabox Group, which supplies wholesale fixed, mobile, and data products and services told its shareholders yesterday that it had entered into a binding conditional agreement to acquire the Brisbane-based communications and data services company.
The deal involves a cash payment on completion of AU$350,000, which Inabox says will be paid from its existing cash reserves. Inabox will acquire all tangible assets and customer agreements, along with the majority of Neural Networks' supplier agreements and staff.
For Inabox Group managing director, Damian Kay, the acquisition is a major part of the company's plans to move into the cloud market.
"Cloud is a key strategic direction for Inabox Group," said Kay. "Our customers' end users are typically SMEs, where demand for cloud services is extremely high. The acquisition of the Neural Networks business sets us up well to take part in the growth of these revenue streams."
Under the agreement, Neural Networks will operate as a wholly-owned subsidiary of Inabox, with the Brisbane company's founder, David Swinton, set to join Inabox Group as general manager of cloud, while also continuing to run the Neural Networks business.
"Inabox Group is focused on enabling companies to sell telecommunications and ICT services," said Swinton. "They are a natural home for the Neural Networks team and I look forward to growing the Neural Networks business and building exciting cloud products across Inabox Group."
The Neural Networks acquisition follows Inabox's purchase last year of Sydney-based wholesale telecommunications provider, iVox Communications.
"Inabox has demonstrated with iVox that it can integrate and gain substantial benefits from strategic acquisitions like Neural Networks," said Kay.
Inabox reported a consolidated net profit of AU$471,344 for the six months ending December last year, a 23.3 percent drop compared to the same period the previous year. However, it also recorded a 16.2 percent increase in underlying revenue, to $24.1 million, for the period.
On 29 May, Inabox told shareholders that it expected its net profit before tax for all of its businesses would be no less than AU$850,000 for the six months from January to the end of June.
"Inabox Group made a significant investment in its systems in the first half of FY14, but still showed underlying organic growth from the Telcoinabox and iVox business," Kay told investors in May. "We continue to attract new resellers and in this half Telcoinabox signed agreements with several well established resellers formerly supplied by ISPOne."