SYDNEY: Comms Group Limited (ASX: CCG) announced Friday it has signed a binding agreement to acquire the business and assets of TasmaNet, a Tasmania-based provider of premium communication and managed IT services, in a deal expected to significantly expand its market share and revenue.
The acquisition, valued at $10 million ($8.5 million upfront and $1.5 million within 30 days of completion), is projected to increase Comms Group’s annual revenue to approximately $75 million, with underlying EBITDA rising to $9 million to $10 million.
The deal adds TasmaNet’s portfolio of corporate data services, government contracts, and key network assets, including a fixed wireless broadband network, high-capacity fiber optic infrastructure, and private cloud solutions.
Strategic Benefits
– Expanded Reach: Comms Group gains 600+ government and business customers, including a long-standing relationship with the Tasmanian Government, which accounts for 40% of TasmaNet’s revenue.
– Network Assets: The acquisition includes critical infrastructure such as data centers, Points of Presence (PoPs) across Australia, and cybersecurity solutions like Firewall-as-a-Service.
– Financial Growth: TasmaNet contributes pro forma annual revenue of $19 million (95% recurring) and $4 million in EBITDA, with gross margins exceeding 50%.
To finance the acquisition, Comms Group will raise $7 million through an institutional placement and a non-renounceable entitlement offer at $0.050 per share, a 16.7% discount to its last closing price. Additionally, Regal Funds Management provided a $10.7 million debt facility, with $4 million allocated to the acquisition.
CEO Peter McGrath called the deal “transformational,” emphasizing its alignment with Comms Group’s strategy to grow its domestic operations and enter new markets. The transaction is expected to close by the end of May 2025, pending third-party consents.
Comms Group reaffirmed its FY25 standalone revenue guidance of $55 million to $57 million and EBITDA of $5 million to $6 million. Post-acquisition, the combined entity is projected to achieve annualized revenue of $75 million.