Next Investors logo grey

2SG acquisition just days away as Vonex completes due diligence


Published 12-FEB-2020 10:29 A.M.


2 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.

Click Here to View Latest Articles

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.

Next Investors Image

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.

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.