Headquartered in Brisbane and employing approximately 40 staff, Digital Sense is a high-quality cloud business that provides a customisable and scalable multi-cloud offering to Enterprise and Government customers.

Strategic Rationale

• Acquisition of a leading Sovereign Cloud platform provider in Australia delivering proven solutions to the Enterprise and Government markets
• Introduces further solution capability in the areas of Infrastructure as a Service (IaaS), Desktop as a Service (DaaS), Storage as a Service (STaaS) and Data Protection as a Service (DPaaS)
• Extensive Cloud offering offers cross sell opportunities to existing Over the Wire customers and offers cross sell opportunities of Over the Wire solutions to Digital Sense customers
• Digital Sense accelerates Over the Wire’s growth and capability in our Cloud Solution pillar, resulting in further diversification of revenue across each of the Cloud. Connect. Collaborate. pillars
• Leverage Over the Wire’s existing national network to take Digital Sense’s offering national
• Strengthens Over the Wire’s ability to provide a complete and integrated solution set to Enterprise and Government customers across their data, voice and cloud requirements
• High quality management team committed to long term success
• High levels of recurring revenue with strong margins
• EBITDA and EPS accretive transaction

Commenting on the announcement, Managing Director Michael Omeros said, “Digital Sense is a high quality cloud business that delivers customisable and scalable multi-cloud solutions to Enterprise and Government customers and positions Over the Wire well to capitalise on the cloud industry’s strong growth outlook. We are very excited to welcome the team from Digital Sense to Over the Wire and we look forward to a positive 2020 Financial Year, as we continue to execute our strategy for growth.”

The post Over the Wire acquisition of Digital Sense Hosting completed appeared first on Over the Wire.

Headquartered in Brisbane and employing approximately 40 staff, Digital Sense is a high-quality cloud business that provides a customisable and scalable cloud offering to Enterprise and Government customers.

Strategic Rationale

• Acquisition of a leading Sovereign Cloud platform provider in Australia delivering proven solutions to the Enterprise and Government markets
• Introduces further solution capability in the areas of Infrastructure as a Service (IaaS), Desktop as a Service (DaaS), Storage as a Service (STaaS) and Data Protection as a Service (DPaaS)
• Extensive Cloud offering offers cross sell opportunities to existing Over the Wire customers and offers cross sell opportunities of Over the Wire solutions to Digital Sense customers
• Digital Sense accelerates Over the Wire’s growth and capability in our Cloud Solution pillar, resulting in further diversification of revenue across each of the Cloud. Connect. Collaborate. pillars
• Leverage Over the Wire’s existing national network to take Digital Sense’s offering national
• Strengthens Over the Wire’s ability to provide a complete and integrated solution set to Enterprise and Government customers across their data, voice and cloud requirements
• High quality management team committed to long term success
• High levels of recurring revenue with strong margins
• EBITDA and EPS accretive transaction

Financial Consideration and Funding

Upfront consideration of $27.0m comprises $21.6m in cash plus $5.4m in Over the Wire shares (at $3.64 per share, being the 10 day VWAP at signing of the LOI). The cash component is fully funded by an institutional placement of $20.0m (priced at $4.00 per share) and existing cash.

The shares issued as consideration to the executive shareholders of Digital Sense will rank equally with existing Over the Wire shares and will be subject to voluntary escrow in full until 30 June 2021 and 50% until 30 June 2022.

The executive shareholders of Digital Sense are entitled to receive further deferred consideration of up to $12.0m (up to $7.0m in FY21, and up to $5.0m in FY22) based on achieving agreed targets, which include a mix of retention (key staff and key clients) and growth targets based around revenue and EBITDA.

With revenue of approximately $18.3m and EBITDA of approximately $5.4m for the 12 month period to 30 June 2020, upfront consideration of $27.0m represents a valuation of 5 times historical FY20 EBITDA.

Capital Raising

Institutional Placement

Over the Wire has funded the acquisition by raising $20.0m through a placement of 5 million shares to institutional and sophisticated investors at $4.00 per share (representing a 3.4% discount to the 10 day VWAP) (“Placement”). Morgans Corporate Limited and E. L. & C. Baillieu Limited were Joint Lead Managers to the Placement, which was heavily oversubscribed.

Share Purchase Plan (SPP)

Over the Wire is delighted to offer eligible shareholders in Australia and New Zealand the opportunity to participate in a Share Purchase Plan at the same price of $4.00 per share (“SPP”). The SPP will be capped at $5.0m with a maximum allotment of shares to the value of $30,000 per shareholder. The SPP will open on 9 October 2020 and close on 26 October 2020. Details of the SPP will be sent to all eligible shareholders who are on the Over the Wire share register as at close of business on 1 October 2020.

Commenting on the announcement, Managing Director Michael Omeros said, “Digital Sense is a high quality cloud business that delivers customisable and scalable cloud solutions to Enterprise and Government customers. We are very excited to welcome such a talented and specialised team to the Over the Wire group. The cloud solutions industry is expected to benefit from tailwinds based on digital transformation, with Digital Sense well positioned to capitalise on the industry’s strong growth outlook.”

The post Over the Wire to acquire Digital Sense Hosting Pty Ltd appeared first on Over the Wire.

The acquisition was funded through Over the Wire’s cash reserves and a debt facility with Westpac.

The Acquired Business is expected to contribute approximately $19M revenue and $6M EBITDA to Over the Wire on an annualised basis.

Strategic Rationale

• Acquisition of a leading platform provider of inbound telecommunication services in Australia and New Zealand, delivering proven solutions to the corporate and small / medium enterprise (SME) market.
• Introduces new solution capability to Over the Wire in the areas of inbound telephony services including call routing intelligence, data intelligence, call management and analytics reporting, via a proprietary technology platform.
• Customer base offers cross-sell opportunities, particularly in outbound voice and Hosted Telephony services.
• Highly capable team led by experienced management that will be able to deliver a whole of business voice offering to the Australian and New Zealand SME market with complementary capabilities, when combined with Over the Wire subsidiary Faktortel.
• Delivers platform capability to Over the Wire that further complements our growth objectives within the Cloud Voice, Mobility and Communications Platform as a Service (CPaaS) market.
• EBITDA and EPS accretive transaction.

The post Over the Wire Acquisition of Australian and New Zealand Voice Businesses of J2 Global Inc Completed appeared first on Over the Wire.

Headquartered in Sydney, the Acquired Business is a leading platform provider of 13, 1300 and 1800 inbound telecommunication services, with over 9,000 business customers ranging from small, independent businesses through to large, corporate enterprises. The Acquired Business has over 80 employees across Auckland, Sydney and Brisbane, and includes leading inbound telephony brands Fonebox and Zintel.

Strategic Rationale

• Acquisition of a leading platform provider of inbound telecommunication services in Australia and New Zealand, delivering proven solutions to the corporate and small / medium enterprise (SME) market.
• Introduces new solution capability to Over the Wire in the areas of inbound telephony services including call routing intelligence, data intelligence, call management and analytics reporting, via a proprietary technology platform.
• Customer base offers cross-sell opportunities, particularly in outbound voice and Hosted Telephony services.
• Highly capable team led by experienced management that will be able to deliver a whole of business voice offering to the Australian and New Zealand SME market with complementary capabilities, when combined with Over the Wire subsidiary Faktortel.
• Delivers platform capability to Over the Wire that further complements our growth objectives within the Cloud Voice, Mobility and Communications Platform as a Service (CPaaS) market.
• EBITDA and EPS accretive transaction.

Financial Consideration and Funding

The total consideration payable is based on an enterprise value of AU$36M and is fully funded from Over the Wire’s cash reserves and a debt facility with Westpac. The Acquired Business is expected to contribute approximately $19M revenue and $6M EBITDA to Over the Wire on an annualised basis.

Commenting on the announcement, Managing Director Michael Omeros said, “This is a highly strategic acquisition for Over the Wire, achieving our plan to acquire a high-quality inbound voice business. The Fonebox and Zintel brands have been leaders in inbound telecommunications in Australia and New Zealand for over a decade. We welcome such a talented and specialised team to the Over the Wire group. This acquisition expedites our geographic expansion plans in New Zealand, as well as extending our inbound voice capability and gives us a stronger foundation for providing a broad range of voice services to our existing customers and the Australian and New Zealand business markets.”

The post Over the Wire to Acquire Australian & New Zealand Voice Businesses of J2 Global Inc appeared first on Over the Wire.