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Vocus sells Macquarie Telecom shares for AU$41m

Macquarie Telecom has increased its 'shareholder diversity' thanks to Vocus Communications selling off 100 percent of its stake for AU$12.20 per share.
Written by Corinne Reichert, Contributor

Vocus Communications has announced selling its 16 percent stake in Macquarie Telecom, offloading 3,358,511 MAQ shares at a price of AU$12.20 per share for a total of around AU$41 million.

Vocus sold 100 percent of its interest in Macquarie Telecom to both institutional and retail shareholders via a block trade, it announced to the Australian Securities Exchange on Tuesday morning.

According to Macquarie Telecom, the sale of Vocus' stake will increase its shareholder diversity and improve the trading liquidity of its shares.

"We are confident that all our shareholders will benefit from the continued growth in our hybrid IT and telecom businesses, including in particular the strong growth we have in our hosting revenue," Macquarie Telecom CEO David Tudehope said.

"We are experiencing continued improvement in datacentre asset utilisation and with strong operational leverage this is driving ongoing growth in profitability."

Vocus acquired its stake in Macquarie Telecom almost two years ago, in April 2015, calling it a strategic investment. Vocus originally paid AU$15.63 million for the 14.5 percent stake, less than six months after its AU$1.2 billion acquisition of Amcom.

Last year, Vocus also merged with M2 to form the third-largest telecommunications provider in New Zealand and the fourth-largest in Australia worth more than AU$3 billion, and acquired Nextgen Networks for AU$700 million, along with the North West Cable System (NWCS) for AU$134 million and the Australia Singapore Cable (ASC) project for AU$27 million.

Vocus announced a net profit of AU$47.2 million for the first half of FY17, up from the AU$24.2 million reported a year prior, which was attributed to its M2, Nextgen, and Amcom acquisitions.

Statutory earnings before interest, tax, depreciation, and amortisation (EBITDA) were AU$168.3 million, up from AU$60.7 million a year previous, with revenue for the six-month period rising significantly, from AU$176.3 million up to AU$888.2 million.

Vocus last month also announced signing a capacity agreement with Asia-Pacific fibre infrastructure company Superloop, giving the latter a 15-year indefeasible right of use for international, inter-capital, and regional Ethernet access and metropolitan fibre capacity across Australia.

Under the AU$20 million deal, Superloop will upscale Vocus' metro, national, and international capacity.

Macquarie Telecom, meanwhile, is focusing more on its datacentre offering: It attributed its 214 percent increase in net profit for the first half of FY17, up from AU$2 million to AU$6.2 million, mainly to "improvement in datacentre asset utilisation".

The telco completed the expansion of its intellicentre bunker in Canberra in February, and was awarded Unclassified DLM certification by the Australian Signals Directorate (ASD) for its GovZone cloud offering earlier this month.

Macquarie Telecom was the first Australian cloud provider to be listed on the federal government's certified list by the ASD back in May 2015.

"Our Canberra datacentre is purpose-built to meet the security needs of federal government customers, providing them a secure government to host data and deploy cloud services. The government's need for security has never been higher, as was highlighted in review of the eCensus failure last year," Macquarie Government managing director Aidan Tudehope said last month.

"The right cloud solution can be much more secure than legacy government systems ... Macquarie Telecom has made a deliberate decision to keep our datacentres on Australian soil to keep all sensitive data within the country and completely under the Australian jurisdiction."

Macquarie Telecom's EBITDA was up by 22 percent to AU$19 million, and revenue was up by 7 percent to AU$106.8 million for the first half of the financial year.

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