Vonex Limited agrees to buy MNF Group’s Direct Business for $31 million

Direct Business sells cloud phone, internet and mobile services to small-to-medium enterprise (SME) and residential customers in Australia

SYDNEY, AUSTRALIA: Vonex Limited has agreed to acquire MNF Group’s Direct Business which services SME and Consumer customers for $31 million, comprising $20 million of cash consideration payable on completion and $11 million of deferred cash consideration payable in monthly installments over 12 months, a news release said.

MNF will retain elements of the business relating to enterprise and government business and express virtual meeting business.

The Direct Business sells cloud phone, internet and mobile services to small-to-medium enterprise (SME) and residential customers in Australia, as well as dedicated audio and video conferencing services.

The acquisition will materially expand Vonex’s footprint of SME and residential customers across Australia and will see the company migrate approximately 5,250 new business customers to its platform.

The Direct Business delivered an unaudited FY21 EBITDA of $5.5 million from revenue of $15.0 million.

Vonex Managing Director, Matt Fahey, said: “Our acquisition of part of MNF Group’s Direct Business will transform Vonex by delivering financial scale and market relevance. Through this deal we are welcoming a highly experienced new team of 30 staff, more than 5,000 new SME customers and more than 180 new channel partners to our platform, and we expect to almost double Vonex’s annualised recurring revenue on a full year basis.

“We see this acquisition as highly complementary, as Vonex has strong existing capabilities across most of the products and services offered by the Direct Business. The businesses also operate under the same revenue model, predominantly charging on a fully inclusive monthly subscription basis. This delivers strong annual recurring revenue growth and very high levels of customer retention.

“We plan to grasp significant opportunities to cross-sell and increase average revenue per user (“ARPU”) for the Direct Business, and also deliver cost synergies of approximately $1 million through immediately lower rates on wholesale pricing. The Direct Business will also provide geographic expansion for Vonex, with an increased presence in Melbourne and Sydney.

“Post settlement of the Placement and drawdown of funds from the new debt facility with Longreach, no further new capital is required to fund the Acquisition and the Company is well positioned for growth. We thank our investors for their support and look forward to delivering accretive value for Vonex shareholders.”

The key transaction documents in respect of the Acquisition are an Asset Sale Agreement (ASA) and a Wholesale Supply Agreement. With all major conditions precedent having been satisfied, including due diligence and approval of the debt facility, completion of the Acquisition pursuant to the ASA is expected to occur in early August 2021.

Vonex Ltd share price

0.12 AUD−0.0100 (7.69%)today

23 Jul, 4:10 pm GMT+10 ·Disclaimer


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