NBN reseller and communications provider Vonex has acquired Brisbane-based 2SG Wholesale for $2.66 million.
2SG is a wholesaler of hardware and connectivity solutions such as mobile broadband, voice, modems, routers, among other products. It also offers wholesale NBN fixed line services through both a direct point of interconnect and via Optus Wholesale. Its customer base includes managed service providers, ISPs and system integrators.
Vonex said the acquisition will allow for a range of cross-selling and upselling opportunities while also expanding its wholesale partner base from 20 to more than 160.
“The acquisition of 2SG Wholesale’s established operations will provide an instant expansion of [Vonex’s] wholesale customer base, and will be highly earnings-accretive,” Vonex managing director Matt Fahey said in the ASX announcement.
“It will empower Vonex to add value to our wholesale and retail customers through better network access, new proprietary billing and provisioning systems and the latest telco products and services.
“We look forward to growing more rapidly and profitably as we integrate 2SG Wholesale’s operations into Vonex’s fast-growing existing business.”
Vonex anticipates 2SG will generate EBITDA of approximately $750,000 in its 2021 financial year and would help boost the group’s annualised recurring revenue to more than $14 million.
The acquisition is subject to the completion of legal and financial due diligence, and is anticipated to complete before 15 January 2020.
Also joining Vonex is 2SG co-founder and former director Jason Gomersall, who will be part of the board as a non-executive director. Gomersall is the current CEO of Brisbane colocation provider iseek Communications.
“Vonex is a business I have watched with keen interest through an exciting period for the Australian telco industry with the rollout of the NBN. I view 2SG Wholesale and Vonex as highly complementary businesses and I look forward to helping to drive the growth of our combined group,” Gomersall said.
“I am excited to have the opportunity to join the vonex board. I believe with my industry experience and expertise I can make a meaningful contribution during this exciting growth phase.”