2SG acquisition just days away as Vonex completes due diligence
Vonex Limited (ASX:VN8) has completed its due diligence with regard to its acquisition of the 2SG wholesale business.
Once complete, the acquisition of 2SG will provide Vonex with a boost to its Annualised Recurring Revenue (ARR),with group-wide ARR expected to increase to more than $14 million.
Completion of the transaction is expected to occur on 28 February 2020, with 2SG co-founder Jason Gomersall to join the Vonex board.
2SG is Brisbane-based established telecommunications and data wholesaler which provides Australian Managed Service Providers, ISPs and System Integrators with access to the latest in hardware and connectivity solutions from leading brands.
The company received circa $7 million in revenue last financial year, with revenue from mobile broadband a key growth driver.
2SG’s mobile broadband capability provides Australian ISPs the opportunity to sell a wireless broadband solution via the Optus 4G Network.
When Vonex first announced the acquisition, its shares surged 50% on the back of the news.
AAS Finfeed has previously reported, the acquisition is a mix of cash and shares with a $500,000 cash component and approximately 21.5 million shares to be issued at an issue price of 10 cents per share, escrowed for 12 months.
The conservative cash outlay helps in preserving the company’s cash position, while the share component highlights the belief that the 2SG Wholesale vendors have in Vonex taking the combined businesses to the next level and generating attractive returns for all shareholders.
Completion of the due diligence into 2SG, comes days after the company announced it was divesting its mining interests, a move that would net the company $2.5 million to help it ramp up its telco operations.
Short-term positions in small, early stage ASX companies,
with high potential and near term price catalysts.
Focusing on resource exploration, early-stage tech, and biotech.
Exceptional opportunities across a broad range of
early-stage growth sectors with strong management.
Seeking 1,000% plus returns across medium to long-term holds.
Longer-term positions in a variety of sectors.
Seeking strong management where traction is established and have entered into a growth phase.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.