Melbourne-headquartered 5G Networks has paid $5.7 million to acquire the Hostworks and Anittel subsidiaries of Inabox.
“We pursued this acquisition because it was exactly what we needed to rapidly expand our core business streams and represents great synergy with our existing business,” said 5G Networks’ managing directory, Joe Demase.
5GN said that the acquisition of Inabox’s non-wholesale businesses would present it with “substantial cross selling opportunities,” allowing it to offer its current network and cloud services to customers of Hostworks and Anittel.
“The acquisition of an established hosting and IT services business support by necessary infrastructure will support growth and customer demand in 5GN’s core business streams,” the company said.
The acquisition will add $43 million of revenue to 5GN, the company said, with the deal representing a 2x EBITDA multiple once immediate synergies are recognised.
It will significantly expand the footprint and headcount of 5GN, giving the company offices in Melbourne, Sydney, Brisbane, Adelaide, Perth and Hobart, as well as regional New South Wales and Townsville.
“We have expanded our geographical coverage in our key competencies — cloud, data and managed services,” Demase said in a statement.
“The acquisition of IAB’s direct business is accurately aligned with our acquisition strategy and 5GN is extremely excited by the positive future that lies ahead.”
The deal leaves Inabox with its Telcoinabox business as well as iVox and Neural Networks.
On 6 June Inabox issued a market update that said it had “become aware of recent and significant movement in its share price and traded volumes, which tend to indicate that the activity may have been based on the use of confidential and market sensitive information which is not generally known.”
Inabox said that it had received a number of “informal approaches” from parties interested in purchasing the entire company or the company’s operating businesses.
Inabox went into a trading halt on Friday ahead of today’s announcement.
In February the company underlying EBITDA of $2.4 million for its first half, down 5.2 per cent on the prior comparable period.