Identifying an opportunity to repurpose existing infrastructure for better utilisation, telecommunications company Swoop Holdings (ASX: SWP) has committed to providing residents of Adelaide with more reliable internet via their acquisition of a dark fibre network that runs through the City of Churches.
The deal will see Swoop acquire the dark fibre network assets and customers of iFibre Pty Ltd for $1.5 million, with $1.2 million payable upfront in cash and the remainder withheld for 6 months, subject to potential claims and adjustments.
“Acquiring iFibre’s dark fibre network is a great opportunity to commence our investment in dark fibre,” said Swoop CEO, Alex West.
“The 34km network covers the major interconnection points, data centres as well as the CBD of Adelaide. Predominantly built in its own ducts and with low utilisation, the acquisition represents significant value compared to us beginning an organic build.
“Having previously been responsible for fibre operations at Vocus, we know both the technical and business aspects of dark fibre incredibly well. Myself and the team are excited to be entering this market again with a network that is immediately ready for sale by our teams”.
Dark fibre is a term used within the telecommunications industry as unused optical fibre. This is existing infrastructure which no longer serves its original purpose but remains in place due to the associated expenses to remove it, outweigh its asset value.
The acquisition will be funded from existing cash reserves with the network to be integrated into Swoop’s existing fibre network which provides fixed wireless internet services to wholesale, business and residential customers.
As one of Australia’s fastest growing challengers providing internet and telecommunications services, Swoop has signaled its intent to accelerate its customer growth via acquisitions.
This included their recent acquisitions of Newcastle-based connectivity provider Countrytell and Sydney-based wholesale voice service provider Voicehub Group in November 2021.
The Company recently upgraded its FY22 expectations from $43.0m – $45.0m to $50.0m – $53.0m, which would represent 72% growth from FY21. Swoop expects this also to reflect favourably on its earnings with FY22 underlying EBITDA upgraded from $10.5m – $11.0m to $12.0m – $12.5m, approximately 150% growth from FY21
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