Wholesale telecommunications and cloud services provider Inabox has announced it has successfully raised AU$4 million via a private placement that it said will be used to pay down short-term debt from its recent acquisition of Hostworks Group and its associated companies.
Under the placement, 3,636,364 fully paid ordinary shares will be issued at AU$1.10 per share, and the placement shares are expected to commence trading on the Australian Securities Exchange (ASX) no later than March 2, 2017, Inabox said.
“We are pleased at the level of interest from both our existing shareholders and institutions keen to become shareholders,” Inabox CEO Damian Kay said in a statement issued to the ASX on Wednesday.
“The capital raised will enable Inabox to pay down short-term debt associated with our successful acquisition of Hostworks. It also provides funds which can be used for further earnings-accretive acquisitions.”
Inabox announced that it had scooped up 100 percent ownership of Hostworks and associated companies from BAI communications earlier this month for a cost of AU$7 million.
Under the terms of the deal, AU$5 million is to be paid upfront — funded by the recent capital raise — with the remaining AU$2 million to be paid over an 18-month period, beginning during the 2018 financial year.
In announcing the Hostworks acquisition, Inabox said it will allow the company to extend its own cloud-based offering and strengthen its position in the South Australian market, as Hostworks currently operates a 24/7 network operations centre in Adelaide.
The addition of Hostworks to Inabox’s portfolio is expected to bring the combined group’s total headcount to about 300 and total revenue to AU$119 million in the first year, Inabox said.
For the 2015 financial year, Inabox recorded a net loss of AU$351,000, down 132 percent over the corresponding period a year prior.
Operating revenue was AU$64.328 million for the 12-month period, up 37.1 percent year on year from the AU$46.910 million reported during FY14, while EBITDA dropped by 22 percent, from AU$2.413 million down to AU$1.877 million in FY15.