5G Networks snaps up ColoAU, bringing automated services to customers
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Special Report: 5G Networks (ASX: 5GN) has snapped up the assets of national and international network operator ColoAU in a $2.9m deal allowing the telco carrier to significantly fast track its wholesale business.
The acquisition consists of $2.4m in cash plus $500,000 in 5GN shares, with a possible earn out of an additional $500,000 in 5GN shares on completing specific revenue targets.
ColoAU owns and operates a high-speed, 100Gb WDM network that connects Australia’s capital cities to dedicated international access and data centres in Los Angeles, Dallas, Singapore, Tokyo and New Zealand.
It also sells and supports data racks in many of its data centres. The company reported $4.2m in the most recent financial year, with EBITDA of $700,000.
The acquisition will greatly benefit 5GN’s customers, who will have access to ColoAU’s automated self-service capabilities for their own data networking and data centre requirements.
ColoAU’s network is built on software-defined networking technology that can deliver 100Gb bandwidth on-demand to any of its data centre or cloud platforms – a critical component for 5GN when connecting and supporting its fibre network across Australia.
As for 5GN, the company was already planning to invest and build the same network technology that ColoAU recently deployed, meaning the company can shift its focus towards innovation and speed to market for partners.
5GN managing director Joe Demase added that the acquisition also opened up the possibility of entering new markets and geographic locations thanks to ColoAU’s international presence.
“ColoAU allows us to fast track a number of growth strategies we have identified including the ability to employ system automation to augment the customer fulfilment process and accelerate the speed of service delivery,” he said.
“We believe our channel partner program will be further enhanced by offering alternative on-demand connectivity solutions which will seamlessly connect to over 67 leading data centres once our fibre network rollout is complete.”
The acquisition follows a successful $18.2m capital raise by 5G Networks to strengthen its balance sheet.