[AusNOG] News: Vocus completes its master plan with A$860m Nextgen Networks buy

[Bradley Amm]

What happens with the deal M2 did with Telstra to use them for backhaul to the NBN POI’s



From: AusNOG [mailto:ausnog-bounces at lists.ausnog.net] On Behalf Of Skeeve Stevens
Sent: Wednesday, 29 June 2016 8:53 AM
To: <ausnog at lists.ausnog.net>
Subject: [AusNOG] News: Vocus completes its master plan with A$860m Nextgen Networks buy

Here we go!!!

As predicted :-)

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Vocus completes its master plan with A$860m Nextgen Networks buy

Vocus has entered a binding agreement to acquire 100% of Nextgen Networks, as well as the Australia Singapore Cable and North West Cable System projects, from the Nextgen Group for A$807 million up front plus a deferred consideration of up to A$54 million.

While the move confirms recent reports noted in today's CommsDay, the firm has been actively working on the deal since late last year. And Vocus executive director James Spenceley told CommsDay that the buy was the final key step in an overarching acquisition strategy that dates right back to Vocus' 2010 listing on the Australian Securities Exchange.

"We've been working on this since December, but we've... been looking at it pre-Amcom. When we listed Vocus, the idea was really to go into dark fibre, so we did that; then to expand geographically with Amcom and FX Networks, then move into consumer with M2. But Nextgen was always on that priority list; we've just got the size and scale now to be able to do that, and the balance sheet to do it," he said. "It's completing the master plan. We've got all the infrastructure, we've got the base to work from in all parts of the business now."

Giving Vocus ownership of Nextgen's extensive intercapital fibre network and its ongoing submarine cable projects, excluding only its datacentre assets, the acquisition will further entrench Vocus as a key player amongst Australia's 'big four' fixed-line operators alongside Telstra, Optus and TPG.

Indeed, Spenceley said that Nextgen's 17,000km national backhaul networks would give Vocus a critical advantage in what has become a key field of fixed-line differentiation: access to NBN points of interconnect. A post-Nextgen Vocus would be able to reach 112 of the 121 POIs nationally, given A$11.5 million of additional capex, along with fibre access to 70 datacentres and 1,100 buildings. "It should give us the second or third most POIs connected of the big four," said the executive director.

Vocus CEO Geoff Horth similarly described the move as providing the "missing piece" in the firm's infrastructure network, allowing it to connect its extensive metropolitan infrastructure to Nextgen's intercapital fibre and "thereby connecting mainland capital cities to regional and remote areas on one owned network."

Vocus will fund its latest acquisition through a fully underwritten equity capital raising comprising a pro-rata A$452 million 1-for-8.90 accelerated, renounceable entitlement offer with retail rights trading, plus an institutional placement of up to around 26.5 million shares to raise an extra A$200 million. It will fund the balance via existing committed debt facilities.

The deal is expected to complete in around three months, subject to clearance from the Australian Competition and Consumer Commission.
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...Skeeve

Skeeve Stevens - Founder & The Architect - eintellego Networks Pty Ltd
Email: skeeve at eintellegonetworks.com<mailto:skeeve at eintellegonetworks.com> ; Web: eintellegonetworks.com<http://eintellegonetworks.com/>

Cell +61 (0)414 753 383 ; Skype: skeeve ; LinkedIn: /in/skeeve<http://linkedin.com/in/skeeve> ; Expert360: Profile<https://expert360.com/profile/d54a9> ; Keybase: https://keybase.io/skeeve
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