Vocus moves to boost network with Nextgen acquisition

Picks up Nextgen’s fibre but not Metronode

Vocus Communications has moved to acquire Nextgen’s backhaul assets as well as the under-development North West Cable System and Australia Singapore Cable in a deal with approximately $861 million.

Vocus will acquire 100 per cent of Nextgen Networks as part of the deal. The company is set to pay $700 million for Nextgen Networks; US$80 million for NWCS as well as US$20 conditional on certain customer commitments; and US$20 million for ASC when construction commences).

The deal will leave data centre operator Metronode as Nextgen Group’s remaining asset.

Vocus entered a trading halt this morning ahead of the announcement

The acquisition of Nextgen’s network assets will complement Vocus’ Australian fibre footprint, the company said. Nextgen Networks has around 17,000 kilometres of fibre and connects to 70 data centres. Post-acquisition Vocus will have fibre access to more than 5000 buildings (Nextgen runs fibre to 1164 buildings).

A post-acquisition capex spend of an estimated $11.5 million will extend Vocus' coverage of NBN Points of Interconnect from 68 to 112 (out of 121 total NBN POIs).

“The acquisition of Nextgen Networks, one of Australia’s largest national fibre backhaul networks, provides Vocus with the missing piece in our existing infrastructure network,” Vocus CEO Geoff Horth said in a statement.

“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 regional and remote areas on one owned network.”

“The sale enables our focus to remain on our core businesses of infrastructure construction, contract mining, mineral processing and public private partnerships,” said CIMC Group CEO Marcelino Fernández Verdes. CIMC owns 29 per cent of Nextgen Group.

The Nextgen Networks and NWCS acquisitions are subject to Australian Competition and Consumer Commission approval. The ASC acquisition is subject to approval by the Infocomm Development Authority of Singapore.

Vocus last year merged with M2 to become Australia’s fourth largest telco.

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