Aussie Broadband acquires Brisbane-based Over the Wire

Australian ISP Aussie Broadband (ASX:ABB) has today formally acquired Brisbane telecommunications and IT solutions provider Over the Wire (ASX:OTW) for $344 million.

The strategic purchase is Aussie’s first acquisition of another company.

Aussie Broadband co-founder and Managing Director, Phillip Britt, said this is a major milestone for the company.

“Today marks a new era for Aussie Broadband. Through this acquisition, we’re going to be transforming our organisation into the very best of Aussie Broadband and Over the Wire. We’ve been working towards this moment for some time now, and we’re absolutely delighted to officially welcome Over the Wire to the Aussie family.”

The integration will see the Aussie Broadband team expand to over 1,000 staff.

As part of the acquisition, Over the Wire brings approximately 16,000 business, enterprise, government and wholesale customers to Aussie’s existing customer base. The company also has over 700,000 active numbers on its voice network.

“We’re going to be carefully working through this integration over the coming months. In the meantime, we’ll continue to provide our excellent support to both Aussie Broadband and Over the Wire customers,” said Phil.

Over The Wire – Simplifying technology to empower business

Founded in 2005, Over the Wire is a technology company and integrated platform provider, focused on bespoke solutions for business and enterprise customers.

The company’s stated purpose is to simplify technology to empower business, and make things as easy as possible for the customer.

Over the Wire’s Managing Director and group CEO, Michael Omero, said he is looking forward to seeing what the two companies can accomplish together.

“Today is the beginning of a new chapter in our journey, and we’re thrilled to join a company that shares our values and commitment to customer service. This is a unity based on opportunities. Together, we will expand Aussie’s presence in Australia and create something quite unique in the market, by combining Over the Wire’s voice, cloud and security services with Aussie Broadband’s fibre assets and high-quality network. We’re looking forward to working together to change the telco game for customers across Australia.”

Tier 1 voice network

Phillip Britt said the integration will provide many benefits for both businesses.

“Over the Wire is a really great fit for us and we believe they will complement our current business/enterprise offerings really well. They’re also one of a handful of Tier 1 voice providers in Australia,” said Phil.

“We see the voice element being a key strategic piece. The need for high-quality voice capabilities is something that has been rapidly growing, particularly in the wholesale space. We plan to turn our Carbon business platform into a full service offering for all business and enterprise communication and IT needs, so we see the voice element coming into the platform in a big way.”

Security and cloud

“Another key strategic piece is Over the Wire’s cloud and security business. We are finding more demand coming through for cloud and security services, with business looking for solutions on how to protect their data,” Phil said.

“One of the key benefits with Over the Wire’s cloud offering is that they own all the infrastructure, either in their own data centre in Brisbane or in third party data centres nationally. Primarily, the cloud offering is targeted towards large government and large businesses, and this integration is a good opportunity to further expand into these areas,” he said.

The joint venture is expected to bring annual cost synergies of between $8 million and $11 million within three years.

“Ultimately, this acquisition gives us the chance to expand our product and skill capability, and further accelerate our growth in the enterprise/wholesale markets in Australia. We believe that together we will be stronger, and we can bring something extraordinary to the telco industry,” said Phil.

Board Changes

As part of the deal, Over the Wire’s Managing Director and group CEO Michael Omeros, will join Aussie Broadband’s board of directors.

Michael has more than 25 years’ experience in the IT, telecommunications and data industries. In 2015, he led Over the Wire to a successful launch on the ASX. Since then, Michael has overseen a significant expansion of the company through a combination of organic growth and acquisitions.

In a statement, Aussie Broadband’s Board acknowledged the outstanding contribution made by retiring Board member, Chief Technology Officer John Reisinger.

“While John will continue as Chief Technology Officer of the enlarged group, we think it’s incredibly important to acknowledge the outstanding contribution he has made over the past 18 years, from the original formation of Aussie Broadband’s predecessor company through the significant growth in recent years to today’s milestone,” said Board Chair Adrian Fitzpatrick.

“John has overseen the development of our award-winning software and network infrastructure, which has been the foundation for our rapid expansion. He has one of the most creative technical minds in the industry, and we look forward to his ongoing contribution and leadership to the enlarged group,” said Managing Director Phillip Britt.

The Aussie Broadband Board wishes to acknowledge the hard work undertaken by management teams in getting to this point and looks forward to the next chapter of the company.

More information about Aussie Broadband can be found here.