SYDNEY, AUSTRALIA: Swoop has entered into a binding sale agreement to divest the entire issued share capital of Voicehub Group Pty Ltd and Harbourtel Pty Ltd (the entities that own and operate Swoop’s wholesale focused voice call termination business) to Pivotel for $9m cash.
The purchase price is comprised of $8m payable on completion and $1m to be held in escrow (and adjusted based on performance of the business for 9 months post completion).
The acquisition is subject to customary conditions precedent including obtaining consents to change of control and employees entering into new employment agreements on terms satisfactory to the Pivotel.
Commenting on the transaction, Swoop Chief Executive Officer Alex West said “As we close out FY24 we continue to see the core underlying residential and SMB focused business units deliver strong organic growth across our key products of FW Broadband, NBN, Mobile and Voice.
Whilst we have seen some growth since the original acquisition of Voicehub Group, we have made the decision to divest this business in order to focus on our key markets and customers.
The proceeds of this transaction will provide additional balance sheet flexibility as well as being used to fund growth in our residential infrastructure, mobile and NBN sales engine and provide a stronger operating cash position in the underlying business for FY25.
We are pleased this process has reached a successful outcome; and that our customers and Voicehub staff will find a good home with the Pivotel team. This sets up the business well for FY25 and provides additional firepower for continued organic growth in the year
ahead.”
The purchase price is $9 million in an all-cash transaction, and represents a 5.2 and 4.5 times multiple of the business units’ FY23 and FY24 normalised EBITDA. The Voicehub business was originally acquired by Swoop in October 2021 for a purchase price of $6m (comprised of $4m cash and $2m Swoop Shares).
The divestment proceeds will provide balance sheet flexibility as well as funding growth across Swoop’s core residential, SMB, data and voice businesses.
As part of the transaction, Swoop has entered into a 5-year contract with Pivotel to maintain its wholesale rates and cost structure. The parties are targeting completion on 1 July, 2024.
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