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MyNetFone buys ISP Connexus for $4.75m

Australian telecommunications provider, MyNetFone (MNF), has announced that it will purchase Melbourne-based Internet service provider (ISP), Connexus, for $4.75 million in cash.

Connexus has been in business for more than 23 years and specialises in delivering data communications to small and medium enterprise (SME) customers. It has approximately 15 staff in its office.

The transaction is to be funded, in part, by way of a $3m share placement to institutional and sophisticated investors, by issuing 4,167,000 shares at $0.72. The remaining $1.75m will be funded from free cash flow.

The MNF Board expects the acquisition to contribute gross revenue of $5.2m per annum, approximately $1.6m to its pre-tax profit over the next 12 months, and over $2.1m in annualised earnings before interest, taxes, depreciation and amortisation (EBITDA) post-synergy

According to a statement, the ISP will benefit MNF because "It is valued at a low pre-synergy multiple of approximately 2.9 times EBITDA, and has a strong and loyal customer base in the SME sector. Additionally, it offers valuable synergy potential to MNF in network consolidation, cost sharing and product cross-selling."

The Connexus customer base consists of approximately 1000 SMB customers and about 600 residential DSL customers.

"Connexus provides us with a significant product portfolio in the managed data space, which will allow MNF to become a 'one stop comms shop' for Australian SMEs," MNF CEO, Rene Sugo, said. "MNF will now be able to offer customers a full suite of hosted services."

The agreement follows MNF's acquisition of CallStream for $600,000, which was made public last week.


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