Superloop is a 380 million market cap firm that engages in the provision of connectivity services in the Asia Pacific region. The firm operates through the following segments: Connectivity, Services, and Broadband. The Connectivity segment includes the development and operation of independent connectivity infrastructure and services throughout the Asia Pacific region for wholesale and enterprise customers including fibre optic cable, international submarine cables and fixed wireless networks. The Services segment includes the provision of outsourced cloud and managed services, cyber security and cyber safety. The Broadband segment includes the provision of broadband services for individual end users including residential NBN, retail fixed wireless and fixed line internet services and connectivity services for hotels, student accommodation sites and schools.
SLC shares have been in a trading halt and following an acquisition and capital raising announcement this morning, SLC shares continued to be frozen.
Why is the Superloop share price frozen?
Superloop announced that it has entered into a binding agreement to acquire Exetel for an enterprise value of $110 million, representing 10.0x FY21 EV/FY21 pre synergies, 6.9x FY21 EV / FY21 Forecast EBITDA post synergies. The Offer consideration comprises $100 million in cash and $10 million in Superloop shares and is expected to be completed late July 2021.
The acquisition of Exetel enables Superloop to accelerate utilisation of its infrastructure assets, through scaling its consumer & business customer segments. It delivers increased financial scale and market relevance. The transaction is fully aligned with Superloop’s growth strategy, continuing to provide super fast, easy & reliable connectivity to now 3x more homes & businesses.
The acquisition is to be primarily funded by a fully underwritten Institutional Placement of $49 million and an accelerated non-renounceable entitlement offer of $51 million to raise gross proceeds of approximately $100 million. Approximately 117 million new Superloop ordinary shares will be issued, representing 32.1% of existing shares on issue.
The trading halt is likely to remain in place until further details are released by Superloop. Given the combined benefits from the acquisition, a positive reaction by the market is thus expected once trading eventually resumes. Currently, SLC shares last closed at $1.04 a share.
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