Satellite Worldwide : Three Acquisitions Across Australia and Norway

Three Acquisitions Across Australia and Norway

06 March 2017

Satellite Solutions Worldwide Group plc (AIM: SAT), the global communications company specialising in rural and last mile broadband, has agreed to acquire the entire issued and to be issued share capital of BorderNET Internet Pty Ltd ('BorderNET') in Australia and the customer bases of NextNet and AS Distriktsnett ('ASDN') in Norway for an aggregate consideration of £1.8m, to be satisfied by a mixture of cash and shares. The cash elements of these transactions will be financed by utilising the recently announced HSBC facility.

The acquisitions are a continuation of SSW's roll-up strategy whereby BorderNET's operations will be integrated into the existing Australian business (Skymesh) and NextNet and ASDN will be integrated into SSW's existing Norwegian hub (Breiband). The acquisitions bring an additional 5,500 customers in aggregate, creating greater scale and market share as well as the opportunity for operational gearing through cost efficiencies and network optimisation.

About BorderNET

BorderNET provides satellite broadband to c. 3,500 residential and business customers in Australia and specialises in providing broadband services to farming and remote communities. It has a loyal customer base and integration with the group's Australian operations is expected to result in cost synergies. The Australian government, via NBN Co, continues to invest in its SkyMuster satellites which will underpin continued customer growth by providing increased access to satellite broadband services.

Conditional on receipt of consent of NBN Co, the Australian Government's wholesale broadband provider, the Company will acquire the entire issued and to be issued share capital of BorderNET Internet Pty Ltd for aggregate consideration of AUS$1,852,500 (approximately £1,151,336). This comprises an initial cash payment of AUS$1,439,375 (approximately £894,577) including a retention amount of AUS$200,000 (approximately £124,300), with the balance of AUS$413,125 (approximately £256,759) to be satisfied by allotment of SSW shares at a price per share equal to the average mid-price for the ordinary Shares of SSW over the 5 days prior to completion of the acquisition to Mr John Anderson, sole owner of the company. The overall consideration is subject to adjustment in cash in respect of both final customer numbers and net tangible assets at completion.

BorderNET recorded a loss of AUS$26,804 (approximately £16,554) in its most recently prepared accounts dated 30 June 2015 although it has an annualised revenue run rate of over £1m. Post integration, BorderNET is expected to be profitable under SSW's ownership.

About NextNet

NextNet provides fixed wireless and ADSL broadband solutions to c. 1,680 residential and business customers in an area about 150km north of Oslo. NextNet is focused on areas and regions in Norway where there are limited, affordable and reliable broadband alternatives.

The Company has agreed to pay cash consideration for the customer base of NextNet of NOK 5,040,000* (approximately £489,486) and a further NOK 200,000 (approximately £19,424) for stock and certain infrastructure assets.

NextNet reported a loss of NOK 1,535,055 (approximately £148,215) in its most recently prepared accounts dated 31 December 2015 although it has an annualised revenue run rate of approximately £0.8m. Post integration, NextNet is expected to be profitable under the SSW's ownership.

About ASDN

ASDN provides fixed wireless broadband solutions to c. 333 residential and business customers in the West of Norway. It has built and installed its own infrastructure with two major masts and provides another low-cost entry point into this growing market. The Company will pay cash consideration of NOK 832,500 (approximately £80,852) for the customer base of ASDN. The overall consideration is subject to adjustment in cash in respect of final customer numbers at completion.

Andrew Walwyn, CEO at SSW said:'These are the first three acquisitions of 2017, which significantly strengthen our position in these key regions. Having established strong hubs in Norway and Australia last year, we can now readily acquire sub-scale, local businesses and rapidly turn them into profitable assets by integrating them onto our global platform.

'We continue to grow user numbers and revenues in these territories and to actively pursue acquisition opportunities, in line with our global strategy, as we continue our consolidation of last mile broadband across Europe and Australasia.'

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About SSW

Established in 2008, SSW specialises in the provision of rural and last mile broadband services with customers across 32 countries. SSW's solutions target B2C and B2B users, and the Company has products developed specifically for the broadcasting, Police and Military markets. SSW operates a number of brands such as Europasat (Europe), Breiband (Nordics) and SkyMesh (Australia) and is now the fourth largest independent provider of satellite broadband internet services in the world.

The 2015 listing on the London Stock Exchange together with the support from Business Growth Fund and investors in 2016 have put the Company in an excellent position to continue strong organic growth in its subscriber base and recurring revenues as well as execute on preferred acquisitions. The Directors believe there is a major opportunity to continue this organic growth and as appropriate consider acquisitions throughout the fragmented European satellite broadband market and further afield.

Working closely with satellite owners and operators, SSW targets customers in the 'digital divide' with solutions that deliver up to 30 Mbps satellite based broadband services or fixed wireless to almost any premises, whether residential, commercial or industrial across Europe and Australia, irrespective of location or local infrastructure.

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