Webcentral to acquire 5G Networks

The ASX-listed company has announced plans to absorb 5G Networks into its business as part of a broader diversification strategy.

In a note to shareholders, digital technology company Webcentral unveiled plans to acquire 100 per cent of 5G Networks' fully paid ordinary shares via a scheme of arrangement.

A committee of 5GN independent directors have unanimously recommended the deal to shareholders, which have been offered two Webcentral shares for every 5GN share.

According to Webcentral, the deal is aimed at diversifying the business and improving its financial portfolio as part of a broader push to secure a position among ASX300 listed companiees.

The acquisition is expected to trigger a 20 per cent increase in Webcentral’s EBITDA.

Other reported benefits of the acquisition include:

simplified capital structure with one group of shareholders, positioning the company to target large accretive acquisitions;
combined cost synergies estimated at $2 million to help drive the expected earnings increase;
acceleration of organic revenue growth by streamlining sales channels and introducing complementary services offered to existing partners; and
complementary board and senior management teams.

“The combined group will be strongly positioned to grow by acquisition to complement organic growth,” the business said in its note to shareholders.

Webcentral is 100 per cent Australian-owned company, offering a range of digital services.

The company’s service portfolio includes domain management, website development and hosting, office and productivity applications, and online marketing.