news Vocus Communications has announced the acquisition of Nextgen Networks, along with two undersea cable projects, the North West Cable System (NWCS) and Australia Singapore Cable (ASC).
The deal will set the firm back A$861 million via an A$807 million up-front payment, with a deferred amount of up to A$54 million.
According to Vocus’ breakdown, Nextgen Networks accounts for AU$700 million of that total, while NWCS is costing AU$134 million and the ASC just AU$27 million.
The firm explained that it will fund the purchase via a fully underwritten equity capital raising, which will raise around A$452 million via a 1-to-8.90 entitlement offer to existing shareholders. Additionally, an institutional placement of up to around 26.5 million shares is expected to raise approximately A$200 million.
The balance is to be funded via “existing committed debt facilities”, Vocus said in a statement.
The deal is subject to ACCC clearance and other conditions, and is expected to completed in around three months.
“The acquisition of Nextgen Networks, one of Australia’s largest national fibre backhaul networks, greatly enhances Vocus’ existing infrastructure network,” said Vocus CEO Geoff Horth.
“Owning this critical infrastructure will allow Vocus to connect its metropolitan infrastructure to Nextgen Networks’ inter-capital fibre optic network, thereby connecting mainland capital cities to each other and to regional and remote areas on one owned network,” he said.
The NWCS is a 2,000-km mostly undersea ultra-speed data networking cable connecting offshore oil and gas facilities between Port Hedland and Darwin to on-shore locations including data centres and business headquarters.
Australia Singapore Cable was established to design, build, own and operate a new high-quality, high-capacity submarine cable directly connecting Perth to Singapore. It will cover a total distance of 4,600km and is scheduled for commercial operation late 2016.
Vocus already operates a 17,000km fibre backhaul network and the addition of Nextgen and the two development projects is likely to greatly enhance the company’s position as a telecoms provider in the Australian Market.
Horth said that the acquisitions represent a “compelling opportunity” for Vocus shareholders and strengthen Vocus’ position as the “fourth pillar in Australian telecommunications”.
Vocus’ Executive Director, James Spenceley, commented: “The Nextgen Networks national fibre network is a world class asset that brings to Vocus fibre access to 70 data centres, fibre access to more than 1,100 buildings and requires only A$11.5 million of additional capital expenditure to bring our combined points of interconnect (POIs) to 112 of 121.”