Fixed wireless and wholesale network infrastructure provider Swoop Holdings Limited (ASX:SWP) (Swoop) has purchased Queensland-based national mobile virtual operator Moose Mobile for $24 million. Moose currently provides over 94,000 mobile services on the Optus network via a mobile virtual network operation agreement to clients across Australia.
What does the Moose Mobile deal mean to Swoop?
The purchase comprises of $19 million in cash and $5 million in Swoop shares to be issued at the 5-day VWAP prior to signing. Further, $2.85 million of the cash payable on completion will be held in escrow for six months for any potential claims and adjustments. Swoop CEO Alex West, says, “This is an exciting time for Swoop to be joined by the amazing founders and team from Moose who have specialised in marketing mobile services to residential clients.”
“Their subscriber growth has been outstanding over the last few years with over 94,000 active clients and increasing aggressively recently and are motivated to achieve more.”
“The exciting part is the cross-sell potential into the residential broadband space, with over 94,000 users a target to provide Swoop Fixed Wireless and NBN internet services through; and nearly 26,000 Residential Swoop clients that could receive a Moose mobile service.”
“This acquisition is also in line with our previous transactions in that is provides strong cash generation, with a very high proportion of the EBITA converting to cash that continues our strong positive net operating cashflow; and brings the overall group closer to Free Cash Flow after our capital investments, heading into the next financial year,” Alex further commented.
What were the further highlights of the deal?
The cash component of the acquisition will be funded from Swoop’s Westpac Debt Facility – which was announced on June 16 – and Swoop is aiming for the completion of the deal on 1 August 2022. Here are the further transaction highlights of the Swoop-Moose Mobile deal:
- Swoop has entered into an agreement to acquire Queensland-based national mobile virtual network operator Moose Mobile.
- Moose provides over 94,000 mobile services on the Optus Network to customers across Australia, with strong cash generation.
- The Purchase Price payable at completion is $24m, comprising $19m in cash and $5m in Swoop shares to be issued at the 5-day VWAP prior to Signing. $2.85m of the cash payable on Completion will be held in escrow for 6 months for any potential claims.
- An earn out of up to a maximum of $7 million is payable based on Moose’s FY2023 and FY2024 EBITDA performance and Services In Operation growth.
- The Purchase Price represents 6.9x multiple of Moose’s forecast FY22 Free Cash Flow.
- The Swoop shares issued as consideration will be subject to 12 months’ escrow.