OTW - Over The Wire Holdings

[System]

Over the Wire is a provider of telecommunications, cloud and IT solutions. It offers businesses the following integrated suite of products and services: Data Networks and Internet; Voice; Cloud and Managed Services; and Data Centre Co-Location.

Over the Wire has approximately 50 full-time employees and is headquartered in Brisbane, with
additional offices in Sydney and the Gold Coast.

It is anticipated that OTW will list on the ASX during December 2015.

https://www.overthewire.com.au

 

[Dona Ferentes]

not much written on this. Came to my attention as a Naos (NSC) pick:

• A strong result with organic revenue growth of ~10% and lift in EBITDA margins.
• Acquired two inbound voice provider businesses with 9,000+ customers
• On track to be the 7th operator of a national voice network.
• Continue to build out their wholesale offering.

... but I'm not sure the business proposition is that brilliant. Small may be nimble but is it efficient?

 

[bk1]

Recently acquired two smaller business that came with a substantial customer base, acquisitions seems to be the way to go among these smaller IT companies. I'm interested to see if they can avoid indigestion, much like 5GN, etc.
I continue to hold.

 

[Dona Ferentes]

Recently acquired two smaller business that came with a substantial customer base, acquisitions seems to be the way to go among these smaller IT companies. I'm interested to see if they can avoid indigestion, much like 5GN, etc.

There are a lot of "smaller telco / tech/ IT/etc" companies. Consolidation is a natural, but also is change. I'm not sure 'the 7th biggest voice" aspiration is world shattering, even if it is national! But the tilt towards data, and cloud and cyber security and growth is!! So I'm interested.
Finding the winner, which probably lies between 'slow n steady' and 'indigestion' , is the challenge.

 

[Dona Ferentes]

up and down and all around... OTW not really much different to where it was at last post but is up compared to a year ago. One invedtmrnt manager seems to have patience (optimism?):

OTW informed the market that they do not expect to meet FY21 consensus expectations due to a hardware supply deal not being delivered until July 2021, and thus not recognised until FY22 (the resultant EBITDA effect was $1.50 million).

Management also made several other notable points; organic revenue growth for 2H FY21 was ~7% (or ~+15% annualised), new recurring revenue signed in Q4 FY21 will exceed $350,000 contracted monthly recurring revenue (MRR), and 50% of the EBITDA benefit from the Tier 1 Voice Provider project will be realised from 1st July.

From our point of view the miss to earnings is a disappointment, mainly because OTW management have made a regular habit of missing expectations solely due to the non recurring part of the business. Looking through this, the underlying core of the business looks sound and if anything, looks to be expecting stronger growth going forward. The CEO comments that FY22 is expected to generate +15% organic recurring revenue growth driven by a solid pipeline of opportunities were also reassuring. In the FY21 result we will also be looking for further clarification around large new client wins for wholesale clients who can utilise the OTW Tier 1 voice capability.

 

[Dona Ferentes]

Over The Wire Holdings Limited advises that on 14 October 2021, it received an unsolicited, non-binding indicative offer from Aussie Broadband Limited to acquire all of OTW’s shares by way of a scheme of arrangement representing $5.75 value per OTW share.

The discussions between the parties in relation to the NBIO are preliminary and incomplete and no agreement has been reached in relation to any transaction. There is no guarantee that any agreement will be reached or that a transaction will eventuate.

The proposed scheme consideration is $5.75 in value per OTW share, with the mix of cash and scrip consideration to be determined.

 

[Dona Ferentes]

ABB and OTW sign the Scheme of Arrangement

• The acquisition of Over the Wire (OTW) will be by a recommended Scheme of Arrangement.
• The combination is anticipated to deliver annual cost synergies of between $8.0 to $12.0 million within 3 years, ongoing capital expenditure savings, and significant acceleration of skills, products and solution capabilities for the group.
• The proposed transaction is expected to be EPS accretive on a pre and post synergy proforma statutory FY21 basis.
• Over The Wire acquisition consideration of $5.75 per share funded with existing cash, new debt facilities of up to $175.0 million and new shares issued by Aussie Broadband to OTW shareholders.
• Over The Wire confirms FY22 EBITDA guidance of $33.0 million.

Aussie Broadband will provide shareholders in OTW the ability to receive Scheme Consideration representing $5.75 per OTW share with the following alternatives:
• 80% cash consideration and 20% scrip consideration (Default Option) equating to $4.60 cash and 0.23 ABB shares for each OTW share;
• 100% cash consideration equating to $5.75 cash per OTW share (Cash Consideration);
• 100% scrip consideration equating to 1.15 ABB Shares for each OTW share (Scrip Consideration); or
• At least 1% but less than 100% scrip consideration with the balance payable as cash consideration (Mix and Match Consideration)

 

[Dona Ferentes]

Over the Wire Holdings Limited (ASX:OTW) announced that the scheme of arrangement with its shareholders was implemented 15 March. The scheme was approved by shareholders on 24 February 2022, and by the Federal Court of Australia on 3 March 2022. Aussie Broadband (ABB) now holds all shares in Over the Wire. Former Over the Wire shareholders on the scheme record date (8 March 2022) have been paid according to the respective elections of scaled back cash and scrip.

 

[System]

On March 16th, 2022, Over The Wire Holdings Limited (OTW) was removed from the ASX's Official List in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement between OTW and its shareholders in connection with the acquisition of all the issued capital in OTW by Aussie Broadband Limited.