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Aussie Broadband (ASX: ABB) has won over the board of Symbio Holdings (ASX: SYM) to proceed with a $262 million takeover of the cloud-based communication services group which will position the merged entity as Australia’s fourth largest internet provider.
The cash-and-scrip deal, which values Symbio at $3.01 per share, has been unanimously accepted by the board which has recommended shareholders vote in favour of the offer.
“We have been impressed by the Symbio story, its team and its culture, which we think is well aligned to ours,” says Aussie Broadband CEO Phillip Britt.
“Symbio brings additional scale and capabilities that will support the continued growth of Aussie Broadband’s wholesale and enterprise and government offering.
“We are excited about the future potential of this combination, leveraging the strengths of both businesses to create long-term value for shareholders.”
The acquisition, which has an implied equity value of $262 million, will see Symbio shareholders receive $2.26 in cash and 0.192 Aussie Broadband shares for each Symbio share, or the equivalent of $3.01 per Symbio share.
The news sent Symbio shares almost 6 per cent higher to $2.91 in early trade on the ASX, although still short of the implied value of the deal.
Aussie Broadband says the acquisition is ‘highly complementary’ to its business and strategy, with the merged entity positioned as a ‘scale, diversified modern voice, business and unified communications player in Australia’.
Aussie Broadband plans to operate Symbio as a standalone business in the near-term following acquisition, with the businesses set to be integrated over time.
The acquisition expected to be earning-per-share accretive in the first full financial year after completion, before synergies.
Symbio was founded in Sydney by Rene Sugo and Andy Fung who predicted Voice over Internet Protocol (VoIP) would replace traditional cooper phone networks. Within six years of establishment, it listed on the ASX and completed its Australian network, helping to facilitate the entry of Skype and other VoIP pioneers into the market.
The Symbio board has recommended the Aussie Broadband offer as being in the best interests of shareholders in the absence of a superior proposal.
Symbio shareholders will be asked to vote on the takeover in early February 2024 with the buyout expected to be finalised shortly afterwards.
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