Vocus enters AU$23.5 million datacentre deal with EDC

Australian telecommunications provider Vocus Communications has entered into agreements worth AU$23.5 million to acquire two datacentres from local disaster recovery company Enterprise Data Corporation (EDC).

The AU$23.5 million purchase price for the deal, which also includes EDC's business continuity operations, will be funded from Vocus' existing cash resources, the company said. As at the end of FY14 in June, the company reported cash and equivalents of AU$44.6 million.

Vocus, which is listed on the Australian Securities Exchange, told shareholders on Friday that the acquisition represents "an attractive opportunity to acquire a well-established business with a diverse contracted customer base across two datacentres".

The company said that it would also add EDC's complementary Business Continuity Services (BC) offering to its suite of solutions for corporate customers in Australia.

The two datacentres are located in Sydney, NSW, and Melbourne's Mitcham, in Victoria, with both sites offering capacity for additional growth, according to Vocus.

"The acquisition complements our existing business by adding two high quality datacentres to the nine Vocus datacentres located across Australia and New Zealand," Vocus CEO James Spenceley told investors. "The BC business is a logical service extension to the current range of services offered to datacentre customers.

"The datacentres have many long-term customers and will provide Vocus with cross-selling opportunities and further redundancy for existing customers," he said. The deal follows Vocus' acquisition in December last year of the remainder of Amcom Telecommunications in a deal that saw Vocus snap up the remaining 90 percent of its former rival.

The company had previously taken a 10 percent stake in the Perth-based Amcom in October, 2014.

The companies said at the time they had identified cost synergies of at least AU$13-15 million per annum, which they expect to be fully implemented by the end of the 2017 financial year.

In August last year, Vocus also acquired ASG Group's Perth datacentre for AU$11.7 million. Spenceley said at the time that the acquisition would provide Vocus with additional cross-selling opportunities and further redundancy for existing operations.