Asia-Pacific fibre infrastructure company Superloop has announced its proposed acquisition of BigAir, with plans to combine its fibre assets with the latter's wireless network and capabilities in order to provide a high-speed wholesale alternative to the National Broadband Network (NBN) across outer metro and regional areas.
Superloop will acquire 100 percent of BigAir's shares via a scheme of arrangement by December, subject to the latter company's shareholder approval.
The acquisition will occur via either an all-scrip arrangement, which will involve 0.371 Superloop shares per BigAir share at an implied offer price of AU$1.13; or a combination of cash and scrip, which would see AU$0.70 plus 0.118 Superloop shares per BigAir share at an implied offer price of AU$1.06, subject to a AU$95 million cap on the amount of cash that will be paid.
It will be funded by the AU$65 million raised overnight via a fully underwritten institutional placement of AU$3 per share; AU$75 million via new revolving debt facility; and AU$104 million in scrip issued to vendors.
According to Superloop CEO Bevan Slattery, the BigAir acquisition will allow Superloop to accelerate its fibre rollout across Australia, and make use of BigAir's fibre-extender millimetre wireless solution for services within a 1km to 4km radius.
Combined with Superloop's fibre network, it claims to deliver a low-cost 10Gbps download/10Gbps upload access alternative to NBN, while also avoiding NBN's CVC charge, which Slattery has previously labelled "galactically stupid pricing".
"Superloop is developing a leading fibre network across Australia and Asia; BigAir brings to the combined group Australia's largest business-focused metropolitan fixed-wireless broadband network and outstanding cloud and manages IT services capabilities," Slattery said.
"In due course, we will seek to leverage BigAir's capabilities across Superloop's entire Asian business. I am eagerly looking forward to the BigAir team joining us and together creating a business which will be a major force in Australian and Asian telecommunications and managed IT services."
BigAir, founded in 2002, has more than 220 staff members, along with 300 points of presence in 60 locations in Australia, and 1,300 clients. It focuses on the wholesale last-mile wireless access market, enterprise connectivity, voice, and cloud, with existing relationships in education, health, aged care, and construction.
The acquisition is estimated to deliver around AU$4 million in annual cost synergies, according to Superloop, with BigAir revealing an FY16 sales revenue of AU$79.7 million; underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) of AU$22.3 million; and underlying net profit of AU$9 million.
Superloop's own full-year results for the financial year featured a net loss of AU$7.2 million -- a substantial rise over last year's AU$1.2 million loss due to an increase in building out fibre, datacentres, and submarine cable landing stations across the Asia-Pacific region.
EBITDA for Superloop was negative AU$5.6 million, up from last year's negative AU$3.55 million, while it recorded its first revenue of AU$6.99 million for the year.
Over the year, Superloop installed more than 190km of fibre, connected 15 datacentres and cable landing stations, and connected 19 enterprise buildings. As of June 30, it had 160 active customers, 378km of fibre, 52 active datacentres and cable landing stations, and 22 on-net enterprise buildings. Its average fibre cores number 288 in Australia, 624 in Singapore, and 2,000 in Hong Kong.
In June, Superloop also announced that it would be raising AU$35.3 million through a fully underwritten one-for-seven pro-rata accelerated entitlement offer of shares for the purpose of funding its Asian network expansion. The retail component of its entitlement offer raised AU$22.45 million.