2SG acquisition just days away as Vonex completes due diligence
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Vonex Limited (ASX:VN8) has completed its due diligence with regard to its acquisition of the 2SG wholesale business.
Once complete, the acquisition of 2SG will provide Vonex with a boost to its Annualised Recurring Revenue (ARR),with group-wide ARR expected to increase to more than $14 million.
Completion of the transaction is expected to occur on 28 February 2020, with 2SG co-founder Jason Gomersall to join the Vonex board.
2SG is Brisbane-based established telecommunications and data wholesaler which provides Australian Managed Service Providers, ISPs and System Integrators with access to the latest in hardware and connectivity solutions from leading brands.
The company received circa $7 million in revenue last financial year, with revenue from mobile broadband a key growth driver.
2SG’s mobile broadband capability provides Australian ISPs the opportunity to sell a wireless broadband solution via the Optus 4G Network.
When Vonex first announced the acquisition, its shares surged 50% on the back of the news.
AAS Finfeed has previously reported, the acquisition is a mix of cash and shares with a $500,000 cash component and approximately 21.5 million shares to be issued at an issue price of 10 cents per share, escrowed for 12 months.
The conservative cash outlay helps in preserving the company’s cash position, while the share component highlights the belief that the 2SG Wholesale vendors have in Vonex taking the combined businesses to the next level and generating attractive returns for all shareholders.
Read: Vonex shares surge 50% on acquisition of 2SG
Completion of the due diligence into 2SG, comes days after the company announced it was divesting its mining interests, a move that would net the company $2.5 million to help it ramp up its telco operations.
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