Comms Group to acquire TasmaNet for $10m in revenue-boosting deal

Communication technology specialist Comms Group (ASX: CCG) has signed a binding business sale agreement (BSA) to acquire leading Australian digital solutions provider TasmaNet for $10 million.

The company is conducting the purchase along with the acquisition of select assets of the broader Field Solutions group of entities, TasmaNet’s current owner.

These include a significant fixed wireless (non-NBN) broadband network in Tasmania and a high-capacity fibre optic network through the Hobart CBD, together with network facilities in Hobart and Launceston.

Increased revenue

Comms Group expects the strategic acquisition to add key network assets and customers while increasing revenue to approximately $75m per annum.

The company is also forecasting the deal will deliver annualised underlying EBITDA of between $9m and $10m.

Chief executive officer Peter McGrath said the acquisition aligns with the company’s strategy by increasing its market share in the government and corporate mid-market sectors, while adding geographical reach.

“We welcome a highly talented TasmaNet team that, together with our existing leadership, has decades of experience delivering exceptional service to business and corporate customers across a range of telecommunications and managed IT services.”

Private cloud assets

TasmaNet also brings with it significant private cloud (Infrastructure as a Service) assets for government and corporate clients, both in Tasmania and on the mainland.

Comms Group is optimistic in its ability to leverage TasmaNet’s diversified service offering to potentially expand into other states and win larger corporate customers nationally.

The company expects to finalise the BSA – which is subject to certain conditions relating to the receipt of third-party consents for the novation of key contracts – before the end of May 2025.

Equity raising

Comms Group also announced an institutional placement and underwritten non-renounceable entitlement offer to raise a total of approximately $7m.

“Comms Group is delighted to welcome a number of leading institutional fund managers as shareholders following the placement,” Mr McGrath added.

The company will use the proceeds of the raising to fund the TasmaNet acquisition and associated costs of the transaction.

It has also established a $10.7m debt facility with Regal Funds Management.