SYDNEY, AUSTRALIA: Vonex Limited (ASX: VN8) has agreed to acquire 100% of the shares of Network Technology trading as OntheNet for $9.6 million, comprising $7.7 million of cash consideration payable on completion and $1.9 million of escrowed shares, contingent upon customer related metrics.

Vonex Managing Director, Matt Fahey, said: “This is a highly strategic acquisition for Vonex. It expedites our plan to diversify our product suite, in particular adding market leading data network services.

OntheNet is a high-quality telco business that delivers data network, voice and hosting/colocation services primarily to business customers.

Both businesses strive for excellence in customer service, with an excellent cultural fit. We are very excited to welcome the talented and highly specialized team from OntheNet to Vonex and look forward to a positive 2023 financial year, as we continue to execute our strategy for organic and inorganic growth.”

OntheNet Managing Director, Tak Woo, said: “We are delighted to have been acquired by emerging telco Vonex. We look forward to partnering with Vonex and continuing to provide high quality services to our customers. Vonex’s technical capability in voice widens the product set that we can offer our customers and is a natural fit with our expertise in data networks.

Vonex’s network of channel partners will provide an exciting growth opportunity and allow us to better leverage our footprint. We have long been impressed with Vonex’s technical capability, as well as commitment to customer service and these were significant factors in our decision to partner with Vonex.”

Founded in 1994, OntheNet provides data network, voice and hosting/colocation services primarily to business customers across Australia. The Acquisition will materially widen Vonex’s product capability, bringing ownership of its fully redundant core network, peering at major Australian Internet Exchange Points (IXPs), and a Tier 3 Data Centre located on the Gold Coast.

OntheNet has a highly skilled workforce of 35 employees, including a large engineering team with strong capabilities in data networking. In FY22, OntheNet delivered revenue of $15.2 million of which approximately 97% is recurring in nature and recorded pro forma EBITDA (unaudited) of $1.9 million

The Acquisition significantly expands Vonex’s data network capabilities and introduces a new product offering through colocation and hosting. The limited overlap between product bases provides a clear opportunity for cross-selling. The chart below outlines the combined FY22 pro forma revenue mix post Acquisition.

Vonex is a full service, award-winning telecommunications service provider selling mobile, internet, traditional fixed lines, infrastructure solutions and hosted PBX and VoIP services – predominantly to small to medium enterprise (“SME”) customers under the Vonex brand. Vonex also develops new technologies in the telecommunications industry, including a feature-rich cloud-hosted PBX system.