Uniti Wireless to acquire FTTP network for $100 million

Written on the 19 August 2019 by David Simmons

Uniti Wireless to acquire FTTP network for $100 million

Adelaide-based teclo Uniti Wireless (ASX: UWL) is continuing on its spending spree with the announcement of a $100 million acquisition.

The group hopes to raise $100 million in order to acquire builder and wholesale operator of private fibre networks LBNCo.

LBNCo is described by Uniti as "highly profitable" and is predominantly comprised of fibre-to-the-premises (FTTP) high speed data services to multi-dwelling units and residential estates.

The acquisition of LBNCo will be around $90 million in cash plus around $10 million in Uniti shares.

"The LBNCo acquisition is strongly aligned to UWL's published "three pillars" strategic growth agenda, providing UWL's fibre business with a high growth, high margin annuity earnings stream, backed by extensive fibre infrastructure footprint," says Uniti.

Over the next 18-24 months Uniti says LBNCo's FTTP network will grow by an additional 22,000 premises.

If the acquisition is successful, LBNCo's leadership team will remain with the business and will take a shareholding in Uniti.

Because of current regulations stipulating that Uniti cannot both own a FTTP network and sell retail services on that network the company will have to divest wholly-owned company Fuzenet as it sells retail services on LBNCo's network currently.

"The acquisition of LBNCo is, by every measure, a transformational event for Uniti Group," says Uniti chairman Graeme Barclay (pictured).

"The FTTP network deployed and continuing to be expanded by LBNCo, is an asset that we feel very privileged to have secured."

The Adelaide-based company is expected to announce its FY19 results on 30 August 2019.

This latest acquisition comes during a busy 2019 for Uniti Wireless, packed with acquisitions and law suits.

Uniti is pursuing aggressive growth post-ASX listing that is being fuelled by fast capital raises and even faster acquisitions.

The recently-listed teclo scooped up Jordan Grives' Fone Dynamics and Call Dynamics in the space of two weeks in May for around $7 million in total.

But it all comes as the telco is embroiled in a law suit against the company's ousted founder Sasha Baranikow.

Uniti and Baranikow are currently engaged in private mediation to solve the alleged unfair dismissal of Baranikow which occurred almost immediately after the company listed on the ASX.

According to court documents obtained by Business News Australia, Baranikow says she was "bullied" into altering her terms of employment, giving chief executive officer Michael Simmons the opportunity to fire her. Simmons is the former interim CEO of Vocus Group.

According to Baranikow, during the time the co-founders were preparing to transform Uniti into a listed company, director John Lindsay emailed Baranokow saying one of Simmons' shareholders was threatening to use his powers to spill the board unless her terms of employment were changed.

Baranikow, who has not yet been replaced, described this communication from Lindsay as "clumsy bullying" in her pleading to the Federal Court.

According to court documents, Baranikow accepted the changed terms of employment so as not to disrupt the IPO process.

The IPO for Uniti was completed on the 13 February 2019, and the next day Baranikow and her co-founder Che Metcalfe lost their jobs at the very company they had built.

As alleged by Baranikow, Simmons' reasoning for terminating Baranikow's employment was that she lacked the requisite experience needed to be COO of a listed company.

Metcalfe's termination was allegedly because Simmons did not think it was "healthy" for him to remain if the new management took Uniti in a new direction.

Uniti Wireless announced the termination of the co-founders on the 15 February, with company secretary Peter Wildy saying they could not remain part of the business because of Uniti's acquisition of FuzeNet and the integration of management from FuzeNet.

Baranikow insists that this is not the reason she was terminated.

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Business News Australia

 
Author: David Simmons

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